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Tech Gear Prices Tipped To Tumble Following Trade Deals

Tech Gear Prices Tipped To Tumble Following Trade Deals

Big Companies such as Lenovo, Apple Microsoft, Samsung and Hewlett-Packard who are primarily manufacturing product in China will be some of the big beneficiaries if a deal reached between China Australia goes ahead and following the announcement last night of a China US trade deal with the USA.

 The big question is will these Companies pass on the savings. 

Big winners will also be Companies that make  videogame consoles, advanced chips and other PC accesories. 

The Wall Street Journal said that yesterdays  agreement between China and the U.S. clears a critical hurdle toward expanding the Information Technology Agreement, whose 78 members account for 97% of IT exports. It comes after repeated calls from tech-industry groups to update the 1997 global deal, saying that eliminating tariffs on such items as CDs and floppy disks was of little value in an era of iTunes gift cards and prepaid credits for, say, the online game “World of Warcraft.”

The Australian Trade deal will see tariffs slashed on videogame consoles by as much as 20%.. The agreement would allow manufacturers to ship their products, either components or finished goods, to another country without having to pay customs duties at the border on the items covered in the updated agreement.

China’s ambassador to the World Trade Organization, Yu Jianhua, has estimated that China would lose $27 billion in import tariffs if the deal was approved, while its export tariff bill would be reduced by just $3 billion. “There is a serious imbalance between cost and benefit,” he said earlier this year.

The Japan Electronics and Information Technology Industries Association, an industry body whose 280 members include Sony,  Panasonic, Sharp and Toshiba  welcomed the deal. “We were waiting for this since the discussion between China and the U.S. stopped last November,” the group said. “If the discussion reopens in Geneva and the tariff elimination is expanded, it would be positive for the JEITA and Japan’s IT and electronics industry.” Panasonic, Sharp and Toshiba declined to comment.

Sony, which makes videogames as well as consoles, could benefit from elimination of tariffs on printed cards with codes that grant credit for online content. Such cards, which face tariffs of as much as 10%, depending on the country, are available for use in Apple’s iTunes online store, and for prepaid videogame subscriptions sold by Sony and other videogame makers, according to industry lobbyists. Sony declined to comment.

Apple and Microsoft were especially pushing for no tariff on the content cards, which are seen as a way to curb software piracy, say people following the negotiations. Microsoft and Apple declined to comment.

“This is particularly important for economies without credit cards,” said John Neuffer, senior vice president for global policy at the Information Technology Industry Council in Washington. “They can go to the local kiosk and buy cards” that let them download software.

Overall, he said, the tariff cuts mean “the price of IT can come down.”