Love him or hate him, Donald Trump’s plan to restrict foreign trade may be good for the technology sector.At this point it’s fair to say the White House is under a new regime as President Obama relinquishes his seat to President-elect Trump. No matter who you voted for, we have to concede that Trump will be our leader for the next four years. Although I didn’t vote for him, my prediction is our technology sector will benefit from him being in office.
Technology, for the most part, is created in the United States and manufactured elsewhere. Companies like Apple create a product and farm manufacturing to countries like Malaysia, China and Singapore. After manufacturing of the components is finished the equipment is returned to our country with a “Made in China” sticker.
Companies other than Apple certified contractors may borrow design concepts from Apple and adapt them to other similar devices. Generic tablets come to our country that could easily be mistaken for Apple brand iPads; however, the copycat tablets don’t have Apple’s quality. Many of the sub-hundred dollar tablets on the market today are cheap imitations.
A prediction I postulated during the election is that Trump’s push to change the trade paradigm could drastically reduce inexpensive and copycat products from entering our country. These products are generally sub par in quality compared to their more expensive brethren and tend to be disposable. Customers tend to purchase cheaper items because of their lower prices when compared to more expensive items in the same technology category.
Trump has proposed increasing trade tariffs with China, eliminating the Trans Pacific Partnership (TPP) and doing away with the North American Free Trade Act (NAFTA) among other things. Each of these agreements was created to make free trade with the member countries easier. My prediction is that countries will no longer benefit from dumping large volumes of cheap products so we’ll end up with better quality but more expensive technology.
Over the past five years I’ve seen the cost of technology rapidly decline with the overall quality following the same path. For the first time in years customers are able to get cheap laptops under $250.00. Large screen television prices have plummeted to the point we can purchase a fifty inch set for under $300.00. With this type of pricing consumers make decisions everyday whether to buy these or their better and more expensive versions.
Although most of our consumer grade equipment is manufactured overseas, it’s a little known fact that much of the higher grade equipment is still assembled here to some extent. Intel i7 processors are produced here along with Apple’s Mac Pro and HP’s high end workstations and desktop computers. Aside from Intel, the other two companies are using mostly imported items to assemble their systems.
Increasing tariffs to unprecedented numbers will have the effect of raising prices of lower cost items to a point that will potentially force consumers to buy better quality or repair what they already own. As it currently stands, we hear customers tell us they are sometimes better off buying new devices even though the quality isn’t equal to the broken equipment. This perpetuates the throwaway and replace mentality we’ve been seeing for years.
No matter if the technology is a TV, laptop, tablet or the simplest of gizmos, cheap devices pouring in from Asia have put a hurt on the American economy. Forcing consumers to purchase a better product from US based manufacturers can’t hurt the US economy and only serves to strengthen our core. Hopefully, for the betterment of the US economy, Trump’s plan will force more technology to be made in the Good Ol’ U.S. of A.
(Jeromy Patriquin is the President of Laptop & Computer Repair, Inc. located at 509 Main St. in Gardner. You can read past articles at www.LocalComputerWiz.com.)