In yet another troubling development, PC component prices (most notably gaming hardware) are set to rise courtesy of the new US tariffs that may come into effect from September 6th, which is just a couple of days away. Although, the final price hikes will be determined by the USTR, expect PC hardware costs to increase by 15 to 30%.
This appears to be Trump administration’s attempt to increase the percentage of hardware manufactured in the States. However, US-based companies generally import most of their individual components from their Asian factories where the low wages and long working hours enable profits while keeping the prices realistic. Despite this though, the profit margins for most PC and gaming hardware manufacturers barely cross the 10-15% mark.
So you get where I’m going with this? This tariff hike will eventually be passed onto the consumer who’ll have to bear the brunt of it. As per reports, prices of video cards, motherboards, coolers, power supplies, and cases may also be effected. As per YouTube channel Gamersnexus, every third-party video card manufacturer as well as power supply makers will be affected.
In another twist to the story, Amazon isn’t allowing these brands to increase their product prices. While this may sound like a pro-consumer move, it’s not quite practical. Given the small profit margin of hardware components (~5-10% on an average), these manufactures can’t bend to Amazon’s demands if they wish to stay profitable.
In order to absorb the extra 25% tariff hike, these manufacturer will almost certainly have to increase the MSRP to stay in business. Due to the stalemate, the only possible work-around for hardware manufacturers is to discontinue existing parts on Amazon and recreate the inventory with new product IDs and higher prices.
This is a developing story and we’ll keep you in the loop as more information is made public.