By Angela Palumbo

Smartphones, laptops, and other electronics devices could get pricier thanks to tariffs.

President Donald Trump announced over the weekend that he would be implementing 10% tariffs on China and 25% tariffs on Canada and Mexico. Mexican and Canadian tariffs were paused on Monday following talks with those countries' leaders, but the levies on China went into effect overnight into Tuesday.

China has responded by announcing import taxes of 15% on U.S. crude oil, machinery, and some cars, and a 10% increase of tariffs on coal and liquefied natural gas.

Tariffs are taxes that are charged onto goods being imported from other countries. Companies that bring in goods from these impacted countries pay those taxes to the government. It's common for those companies to pass the increased costs from tariffs onto the consumer through higher prices. This time around, a 10% tariff on China -- a country where many components and products come from -- is likely to lead to higher priced phones, laptops, and more.

According to a report from the Consumer Technology Association in January, tariffs on technology products could lead to a $90 billion to $143 billion decline in U.S. consumer purchasing power.

"If these tariffs are sticky and they continue to hold on, then I think the time frame for the permanent price escalation is after six to 12 months, when we're going to see that, hey, everything's more expensive," Jim Cagnina, senior market analyst at NinjaTrader, told Barron's.

Just a few of the companies that could feel impacts from tariffs include chip company Intel and PC maker Dell Technologies along with smartphone giant Apple. Some of these consumer electronic makers have already spoken about what tariffs could mean for them.

Intel, Dell and Apple didn't respond to requests for comment about the tariffs.

Intel reported fourth-quarter revenue of $14.3 billion on Jan. 30, which was higher than Wall Street estimates. On the company's fourth-quarter earnings call, interim co-chief executive officer David Zinsner said that "we expect a portion of Q4 revenue upside was due to customers hedging against potential tariffs."

But Intel also provided disappointing revenue guidance for the current quarter. Zinsner said this was due to "added pressure coming from macro uncertainty especially around tariffs, balancing of PC inventory and increasing competition."

As the China tariffs kicked in on Tuesday, shares of Apple were up 1.8%, while Intel and Dell were up 0.2% and 1.8%, respectively.

The trade dynamic could be a problem for an already weakened PC market, which saw demand decline after the Covid-19 pandemic fueled purchases of at-home devices. Companies have been pushing out new AI powered PCs to try to spur consumer excitement, but increased prices along with higher for longer interest rates doesn't bode well for the sector.

"The overall macroeconomic concerns seem to be overshadowing some of the progress and excitement around AI PCs. However, we maintain the view that the impact that on-device AI will have on the industry will be positive, even if the inflection point is delayed," Ryan Reith, group vice president with IDC, wrote in a research report last month.

Meanwhile, iPhone maker Apple is an interesting piece to the tariff puzzle. Most of Apple's manufacturing is done in China. Importantly, though, the Cupertino based tech giant was exempt from tariffs the last time Trump was in office.

When asked about the potential impacts on tariffs during Apple's first-quarter earnings call on Jan. 30, CEO Tim Cook said the company is monitoring the situation, but had nothing more to add. That's led investors and consumers alike to wonder whether the price of iPhones, MacBooks and more would increase.

If Trump's new trade policies stick, one possible outcome would be for companies like Apple to move some of their manufacturing to countries that aren't impacted by the tariffs. Barron's has previously reported that about 80% of smartphones are imported from China, and if the manufacturing moved to other places, the average cost of smartphones could rise by more than $200.

"As the new tariff is imposed on imports from China, Apple could have its manufacturing partners ramp up production in India and ship to the U.S. This could also be done for other Apple products that are manufactured in countries including Vietnam, Malaysia, etc.," BofA Securities analyst Wamsi Mohan wrote on Monday. "We have assumed 80% of Apple products sold in the U.S. can be sourced from other countries, apart from China."

It's also possible that Apple chooses not to increase prices for consumers to keep a competitive edge.

"It might be that they take the decision that 'we're actually going to swallow some of this for our consumers,' especially if competitors don't increase the price, at least in the short term," Martin Balaam, chief executive of product information management platform Pimberly, told Barron's.

In the long-term, though, a potential trade war means consumers may be dishing out more dollars for new gadgets than they once anticipated.

Write to Angela Palumbo at angela.palumbo@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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February 04, 2025 11:52 ET (16:52 GMT)

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