Will Trump’s tariffs make Black Friday a thing of the past?

Bargain hunters shopping for TV sets, smartwatches and fitness trackers may be disappointed this holiday season when it comes to those Black Friday “doorbusters,” after a leading trade organization said it expected prices for tech products to rise by a total of $7 billion this quarter due to President Donald Trump’s tariffs on Chinese-made imports.

But not everyone feels pessimistic about the shopping season. Major retailers such as Target and Walmart say they will not pass on additional tariffs to customers, and will absorb the costs themselves.

With the shopping-intensive fourth quarter just one week away, consumers could see some pain at the checkout, said the Consumer Technology Association, which represents companies such as LG Electronics, Verizon, and Amazon.

“We’re going to see prices creep up,” said Rick Kowalski, the senior manager for business intelligence at the CTA. “Retailers are going to be unlikely to keep prices down as they have in the past.”

“One of the main concerns are the TVs,” he said. “They have been the main doorbuster deals that people go to the stores for on Black Friday. We are anticipating that deals on TVs and some of the other big-ticket items will not be as good as they used to be. Prices probably won’t come down as much as they have in the past.”

Although the White House announced last week it would exempt certain products — including smart thermostats, video cards, and certain PC components — from additional tariffs as a gesture of goodwill to China, holiday wish lists that include cameras, earbuds, and smart speakers are already subject to a new, higher tariff of 15 percent. A separate group of additional tariffs will be implemented Dec. 15, on consumer tech products such as smartphones, laptops, tablets, and game consoles, and someone has to foot the bill for these higher costs.

The tariffs are part of the administration’s efforts to radically rebalance its trading partnership with China and protect against intellectual property theft. The ensuing face-off has led to a monthslong battle between the world’s two largest economies that has stalled investment and slowed global growth.

Yet despite the CTA’s dire warnings, not everyone thinks retailers will be raising prices this season. Not all TVs come from China, and not all tech companies have the same exposure.

“Best Buy’s inventory of TVs with screens 55 inches or larger are shipped from Mexico, so it can mitigate the impact,” Kowalski said. Gaming console manufacturers can shift to another country pretty easily, he noted.

Some consumer advocates even say bargains may be more plentiful this year, after the threat of tariffs pushed manufacturers to ship more product earlier in order to avoid higher costs.

“It created excess shipments, which turned into a glut of inventory — which could lead to great deals for consumers,” said Debra Mednick, associate director of market trends and analysis at Consumer Reports, noting reports of stockpiling in the second quarter.

Retailers naturally want manufacturers to bear the brunt of the price increases. Target, for instance, sent a letter to suppliers just ahead of the latest round of tariffs, saying it “will not accept any new cost increases related to tariffs on goods imported from China.”

Similarly, Walmart has said it will try to “keep downward pressure on prices” amid a shifting tariff landscape.

“As a last resort, if we have to raise prices, we’ll do that to manage or margin to where we need to be,” said Steve Bratspies, chief merchandising officer of Walmart’s U.S. operations. “We want to keep prices lower. And that’s what we’re going to apply to the tariff situation.”

Consumer Reports’ Mednick also wonders how price-sensitive consumers are when it comes to large-screen TVs and products that are infrequent purchases. “When you buy a box of cereal you generally know the price. If a product’s price went up 10 percent and it’s something you buy every five to 10 years, how are you going to know?” she told NBC News.

Ultimately, American consumers are the ones who will decide whether the tariff war is having an impact on their wallet. In August, consumer sentiment saw its largest monthly drop since 2012, as Trump and his Chinese counterpart, President Xi Jinping, ramped up the rhetoric in their trade battle. Spending for the month of September has already fallen by the most in nine months.

“I’m going to make the decision before tariffs kick in,” said Eric Sherman, an executive living in Westchester County, New York, who is considering replacing his 52-inch TV with a new, larger model. “I’m very well aware the cheapest sets come from China.”

“It’s only a matter of time before prices start going up on all these products. Time is of the essence for shoppers,” agreed Kowalski.

Visit the Source: https://www.nbcnews.com/business/business-news/your-electronics-are-about-become-more-expensive-so-who-will-n1054986?cid=public-rss_20190928

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