Should you buy a smartphone right now? What to know as tariff pressure hits Chinese tech

Consumers on both sides of the U.S.-Canada border are bracing for blowback from potential American tariffs on electronics and their components alongside existing levies on Chinese imports.

U.S. President Donald Trump on Wednesday showed signs of backpedalling on his threats in the global trade war. If he doesn’t, however, shoppers can expect the price of smartphones, gaming devices, rice cookers, washing machines and a host of tech gadgets to rise, likely within months.

But that doesn’t mean now is the time to buy the coveted electronics on your wish list.

Here’s what you need to know.

How do tariffs affect the price of smartphones and other electronics?

More than 90 per cent of the world’s iPhones, iPads, MacBooks and other Apple products are made in China. According to the Asia Pacific Foundation of Canada, Taiwan produces more than 60 per cent of the globe’s semiconductors – used in everything from rice cookers to smartphones – while a 2023 U.S. International Trade Commission working paper found that about 92 per cent of advanced chip manufacturing capacity is located on the island.

Earlier this month, Mr. Trump exempted a range of electronics and key components used to make them from so-called reciprocal tariffs of as much as 145 per cent on China and baseline tariffs on other Asian countries. The U.S. maintains a 20-per-cent “fentanyl tariff” on China.

Electronics were exempted just as U.S. tech stocks plummeted, with shares of Apple taking a 9-per-cent nose dive in the two preceding weeks.

But last week, Mr. Trump suggested smartphones and other tech gadgets would be targeted in a forthcoming sector-specific suite of tariffs focused around the semiconductor industry.

His administration launched an investigation on the effect of imports of semiconductors, semiconductor manufacturing equipment and derivative products (think digital cameras and cars) on U.S. national security.

The investigation may ultimately lead to the imposition of U.S. tariffs or quotas on some or all products under investigation.

Will it cost more to buy a smartphone?

If tariffs are imposed on semiconductors or other components and equipment needed to manufacture electronics, the increased costs borne by importers will almost definitely cascade through the supply chain, said Sylvain Golsse, national global trade leader at EY Canada.

Semiconductors conduct the flow of electric current in microchips, which power iPhones, Androids, rice cookers, air conditioners, cameras, LED light bulbs, EVs, refrigerators and washing machines – even rocket ships.

“If the price of a chip increases because new tariffs need to be paid, any intermediate components powered by the chip will become more expensive and, ultimately, the finished good purchased in a store,” Mr. Golsse said.

How much will the price of an iPhone rise?

The most recent projections out of the U.S. after Mr. Trump’s introduction of a 54-per-cent cumulative tariff on China pegged the price hike for an iPhone at 43 per cent. According to analysts at Rosenblatt Securities, this would mean the cost of a basic iPhone 16 model currently priced at around US$799 would spike to US$1,142. The cost of a MacBook and AirPods were estimated to rise 39 per cent.

The calculations hinge on whether Apple passes that cost on to consumers.

Will electronics cost more in Canada, too?

Canadians will likely bear some of the brunt of U.S. tariffs on tech products and the resulting price increases on U.S.-imported goods.

“Supply chains are globalized, so you’d expect to see ripple effects,” said Jenna Jacobson, an associate professor at Toronto Metropolitan University focused on retail.

Major electronics companies will need to brace for overall added costs and uncertainty. And it can be easier for multinational companies to raise prices slightly across the board to reduce costs, instead of unilaterally, according to Jean-Luc Geha, associate director at the HEC Montréal Sales Institute.

“Once prices for items like tech go up, they usually don’t go down unless obsolescence or competition force them to do so,” he said.

Will the cost of tech maintenance and accessories go up?

The cost to repair everything from smartphones to laptops might also go up as components become more expensive.

Tech accessories are likely to become pricier as well: China-based Anker, one of Amazon’s largest sellers of gadgets such as power banks and phone cases, raised prices by 18 per cent on average on a fifth of its products sold on Amazon.

How soon could smartphone prices rise?

A current investigation into semiconductor imports issued by the Trump administration gave 270 days to publish its findings. But it’s possible the investigation is completed before the deadline.

Experts say it’s unlikely semi-conductor-specific tariff-related price hikes would be introduced before new semiconductor levies are actually implemented.

But consumers in Canada and elsewhere purchasing technology products might still notice higher prices within the next few months as a result of businesses managing significant uncertainty stemming from impactful and fast-changing trade and tariff developments, Mr. Golsse said.

Should you buy a smartphone right now?

Even if the Trump administration slapped tariffs on tech gadgets tomorrow, experts say it would likely take a few months for price hikes to trickle down to the retail level.

“There’s typically some lag … between the announcement and the enforcement, so that would give consumers some time to make decisions,” Dr. Jacobson said. Retailers will also often go through existing inventory before raising prices.

“Sales drive people to stores to buy things, often in cases that they don’t need it – just because it’s on sale,” said Adam Chapman, a London-based certified financial planner. “We have the reverse thing happening right now where they’re anticipating higher prices in the future. … It feels like all of a sudden, it’s cheaper than it will ever be.”

Good savers in particular may be susceptible to panic-buying as they love a deal, he said.

But sales aren’t always a good reason to buy. Instead, Mr. Chapman recommends buying quality products – even if they’re more expensive – from the start, and using them for as long as they last: “There’s a lot of people that have iPhones that are six years old and they still work.”

He added that this argument also works in reverse: If your phone is on its last legs, you should buy the premium product now instead of skimping later.