How tariffs impact gadget makers

Image result for How tariffs impact gadget makersAndrew Zolty, the co-founder and head of design at Breakfast, says tariffs are becoming a problem. He and his team build large-scale installations that are often placed in museums, building lobbies, or wherever cool, connected art can go. The commissioned pieces come together by hand, typically in Breakfast’s Brooklyn, New York, office where the team imports aluminum, steel, and printed circuit boards from China and uses those parts to build their art. With the recent tariffs imposed on all of those materials, Zolty says costs are increasing, and the team is going to have to raise their prices.

“It’s been a bit of a wake-up call,” he says. “Even us, we were watching in the news, we weren’t really thinking about it until we got the bill. We’re just like, ‘Alright we have to up our cost because we can’t just eat that stuff.’”

Zolty says nearly every part his team relies on to build products has a tariff on it. But while they’re costing him money, the higher prices don’t encourage him to move manufacturing Stateside. The aluminum and steel come from China regardless, he says, so tariffs still have to be paid even on a product that’s ultimately assembled in the US.

The team’s considering moving additional manufacturing abroad, in fact, to avoid having to import taxed goods. Just this past week, President Trump raised import taxes to 25 percent on billions of dollars’ worth of Chinese goods while China retaliated with additional tariffs on $60 billion worth of US imports to China. The trade war between the two countries is continuing, seemingly without a deal in sight.

Independent gadget makers who build their products Stateside are among the people most affected. Big tech companies, like Apple, have avoided the brunt of tariffs and also have enough cash on hand to absorb the added cost. Small creators are the ones who can least afford an extra tax, and they’re the ones paying the price. Soon, consumers might start paying it, too.

[“source=theverge”]