GPU, Motherboard Prices Will Jump Thanks to US-China Trade War
Up until now, the United States’ ongoing trade war with China hasn’t made much of an impact on tech enthusiasts’ wallets. That’s going to change from this point forward until the US and China settle their disputes or GPUs are specifically granted an exemption from the increased tariffs. Neither of these seems to be particularly likely at the moment.
Up until now, graphics cards and a number of other products have been shielded from the impact of tariffs by US-granted exemptions that shielded them from the price increases. Those laws, however, expired on December 31, 2020. Now that we’re into the new year, companies like Asus are notifying consumers they can expect some unwelcome changes. Juan Jose Guerrero III, Asus’ Technical Marketing Manager, has released a statement on the company’s MSRP pricing expectations for 2021. This applies to both GPUs and motherboards:
We have an announcement in regards to MSRP price changes that are effective in early 2021 for our award-winning series of graphic cards and motherboards. Our new MSRP reflects increases in cost for components. operating costs, and logistical activities plus a continuation of import tariffs. We worked closely with our supply and logistic partners to minimize price increases. ASUS greatly appreciates your continued business and support as we navigate through this time of unprecedented market change.
Asus also notes that more than just GPUs and motherboards may be affected. Price increases are going to vary by GPU value, but the tariffs on Chinese goods ranged from 7.5 percent to 25 percent. This the very last thing PC enthusiasts will want to hear because it’s going to additionally raise the price on GPUs at a time when the graphics cards market is running hot already.
We’ve already seen speculation that these price increases may not be strictly tied to the tariffs and that Asus could be trying to sneak some other cost increases into the space. That’s possible, but it’s going to be difficult for people to tease apart which cost increases are necessary and which aren’t. COVID-19 has increased the price of shipping. Employee labor costs have undoubtedly risen due to the need for various quarantine procedures. While the PC market is doing well at the moment, motherboard and GPU manufacturers may not be able to eat the entire cost of US tariffs, especially if they fall towards the higher end of the scale.
It’s likely to be several months before the incoming Biden Administration makes any major changes to the United States’ trade policy with China. Multiple experts CNBC interviewed in late December stated they do not expect Biden to return to the pre-Trump Administration status quo, but that it’s more likely to apply a collaborative approach with our allies and in partnership with private business. Biden’s administration may also focus on a more targeted set of technologies than President Trump’s broad trade war. Whether any of this will benefit gamers is unknown, and the tariff impact is going to send prices on already difficult-to-source cards even higher.
If you want to see the federal register order, you can do so here. GPUs are specifically covered in Annex A, item (25).