Prices of several consumer electronic goods in Australia which were already facing pressure as a result of a weak Aussie dollar will now face renewed pressure due to Trump’s tariffs against several countries, most notably China.
The US has hit China, a manufacturing hub for consumer electronics, with a 10% tariff on all imports.
It means that key items such as laptops are set to get pricier, with some companies absorbing the price increase rather than passing it on to consumers.
Apple, for now, has decided to keep its prices at their current levels and deduct that 10% tariff from its profit margins.
Other companies, such as Acer, for example, have reportedly decided to pass those increased prices on to consumers. As a result, all Acer products imported from China in the US will become 10% more expensive.
Moving manufacturing facilities outside of China immediately is not a feasible option, nor is shifting hardware manufacturing to US due to labour costs involved and also the fact that some components would still need to be imported and therefore be subjected to a tariff.
JB Hi-Fi Group CEO, Terry Smart, recently told investors that staff are being told to ‘take the deal’ amid increasing competition with a return of on-floor discounting.
“We have processes around understanding discounting but our direction to our staff is to take the deal. Sometimes it’s skinnier than it should be, but we would rather bank those dollars than let someone else do it – even if the end result is a lower gross margin,” Smart said during the retailer’s first half FY24 results presentation, reported Appliance Retailer.
“The decision to discount is up to our staff, but it’s driven by how competitive the market may be. If customers come to us after they’ve found a better price at a competitor store, we tell our staff to take the deal.
“Margin is more dictated by competitor activity and above-the-line discounting has been more aggressive. We’re having to match a lot more deals on the floor – compared to during Covid.”
