I’ve been hearing news stories about tariffs and trade wars for a few weeks now. Typically, these stories are viewed through the highly tinted glasses of whichever source you’re listening to or watching, quickly shifting to focus more on President Trump or various other political personalities. I hadn’t quite put together how these proposed tariffs would effect me personally till I saw Bunnie Huang’s take on the subject.
Bunnie, who is much more diligent in his research (and considerably smarter) than I am, has broken down not only how the proposed 25% tariff on electronics will hurt makers, but how it will ultimately encourage offshoring. Being intimately involved in Chibitronics and several other smaller business that make products that would be affected has Bunnie, understandably, very upset. I highly recommend you go read his blog post on it.
To simplify and shorten it to an extreme degree: These tariffs apply to unfinished electronics such as components and development boards, but not completed electronics. That means that it can be cheaper to just have your product completely made in China and then imported, as opposed to just buying the parts and having it assembled here. For hobbyists and small companies, buying components will become much more expensive.
I asked him if he’s had any additional thoughts since he published his breakdown and replied that he’s still breaking down all the responses. There was plenty of good feedback.
A huge variable I realize that nobody knows the answer to is how durable the tariffs will be, e.g. are they here for just a couple months until the midterms are over, or are they a fixture and ultimately a new revenue stream the government will become dependent upon to tighten up the deficit caused by the tax cut and jobs act. if it’s the latter then there will be huge problems for the US, as this is a hugely regressive tax.