On April 11, President Donald Trump made waves by announcing his intention to issue a short-term exemption on select products. He dropped the bomb that targeted tariffs on electronics could start by May at the earliest. This announcement led to a firestorm of criticism from the affected consumer and manufacturer communities. Analysts are reporting a new wave of panic-buying as customers desperately stock up ahead of worrying about future increases.
Industry insiders are speculating that the expected electronics tariffs could be a matter of days, months or never implemented at all. That uncertainty leaves employers in a tight spot. A lot of consumers are making snap decisions given how unclear the landscape of these tariffs will continue to be. They worry that costs for new devices will increase dramatically. According to Thibaud Hug de Larauze, CEO of Back Market, “Maybe some people rushed into [replacing their smartphones or computers] earlier, because they were afraid it’s going to cost so much more weeks from now.”
Analysts suggest that companies like Apple may need to increase their prices by hundreds of dollars per product, depending on the specifics of the tariffs. Today, the vast majority of smartphones and computers sold around the world are made in China. When imported to the U.S., these goods are subjected to an eye-popping 145% total tariff rate. This environment produces an overwhelming incentive for consumers to seek out third-party alternatives.
Hug de Larauze emphasizes the unique opportunity presented by this situation, stating, “This is a big opportunity to change the way American people consume this stuff, because the incentive has never been as high to avoid those tariffs.” In his crystal ball, he sees sales moving away from discrete transactions toward relationship building and company branding. A greater number of consumers will turn to used or refurbished devices as they look to save money.
Dan Ives, an analyst at Wedbush Securities, supports Hug de Larauze’s views. He argues that long-term tariffs will result in a permanent bump in both short-term refurbished electronic sales and repair jobs. He states that “We believe 80% to 90% of consumers like buying a new smartphone [and] buying behavior is hard to change.” He thinks that more consumers would be willing to wait and accept used devices until their finances are more secure.
So when after Trump announced national tariffs, Back Market’s sales went incredible skyrocketing. For them, it meant tripling their sales in just a week! Hug de Larauze expects this trend to continue, indicating that “What I’m expecting with the tariffs is that this is going to change [to] two-thirds being sold to U.S. customers, because there’s incentives, definitely, to save money when you already need a product.”
We understand that consumers are facing an extremely confusing environment. How their buying behavior will change in response to possible tariffs will be fascinating to watch. In the weeks ahead, we’ll learn whether these tariffs will go into effect at all. We’ll find out exactly how much they’ll shape the future of the electronics industry.
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