On September 24th 2018, President Trump put in place his 2nd wave of tariffs on Chinese imports – invariably having a massive effect on the PC gaming market. The early-fall tariffs were worth $200 billion or 10% on 5,745 goods ranging from fish to computer parts. On January 1st 2019 those tariffs are slated to increase to 25%. As it relates to gamers, if you ever looked at the back of the majority of your PC gaming parts, many gaming parts like graphics cards, motherboards, CPUs and power supplies are all manufactured in China meaning they can become more expensive under these tariffs.
Why Will PC Gaming Parts Get More Expensive?
Contrary to what many may think, tariffs are not absorbed by the country they are imposed on. Rather the company that manufactures those products in China will need to absorb the tariffs. For example, Company A creates $500 million worth of GPUs in China and it costs Company A $50 million to ship and import those GPUs. With the tariffs, it now costs $55 million (10% of $50 million) to import those GPUs.
While $5 million may not sound like a lot, for an industry like electronics, that can be a significant cut into a company’s profit margins. To absorb the extra costs, Company A may pass those costs onto its customers, making it’s products more expensive. The point of tariffs is to help companies that do not import goods (made in America). American manufacturing is more expensive than in China, so goods made in America are more expensive. The tariffs are supposed to ‘level the playing field’. There are numerous arguments against tariffs as an economic policy – but that is beside the point of what we are discussing here.
Which PC Gaming Parts Will Get More Expensive?
The actual tariff list itself is fairly vague when it comes to saying which items will be squeezed by the tariffs. You can see a full list of every item being tariffed here. If you go through, you’ll notice that it doesn’t explicitly say “graphics cards”, “motherboards” etc. Rather if you go to line items starting with 8473.30.00, you’ll see products regarding electronics. Manufacturer, Gigabyte, helps confirm that these products include most game accessories. Below you can see a full list of items that are going to be tariffed if they are shipped from China:
AccessoryEst. CostNew CostGraphics Card$400$440Motherboard$74$81SSD$140$154Mouse$50$55Mouse Pads$10$11Keyboard + Mouse Bundles$50$55CPU Coolers$80$88Power Supply$57$63Cases$70$77Chairs$100$110 $1,031$1,134
Most gaming parts will be affected by the tariffs. The most notable exceptions are RAM which have not be included as part of the tariffs. Other notable exceptions include notebooks, keyboards and headsets.
Are These Tariffs Going to Last Forever?
It is hard to say how long these tariffs may last. In January they are due to jump up to 25% and there aren’t any clear plans after that. China and the US may eventually reach an agreement to lower tariffs. If not, it may not be until 2020 when a new administration could reverse the tariffs. Luckily, the manufacturers are likely to take matters into their own hands beforehand.
NVIDIA and AMD are likely to migrate their manufacturing from China to Taiwan which is not being tariffed. While Taiwan is technically part of China, imports from Taiwan are not being tariffed. Other big manufacturers like ASUS, Gigabyte and MSI will follow suit. Unfortunately, the switch to Taiwan may take some time, meaning these price increases can be around for a little while. It may be best to hold off buying the new RTX graphics cards while the prices are higher.