The return of Donald Trump to the White House is expected to have significant repercussions in the technology sector, starting with an increase in the prices of electronic devices, due to proposed higher tariffs.
“The newly elected president has pledged to increase tariffs by 60% on imports from China and between 10%-20% on imports from other countries,” said Enrique Dans, professor of Innovation at IE Business School in A Coruña. The Spanish professor predicted that “the prices of computers, tablets, smartphones, consoles, monitors and televisions will increase by 30%-45%.”
Enrique Dans explained that “the trade war with China will probably escalate” and this could affect global supply chains “seriously.” “In the technology sector, it could particularly hit American companies that manufacture their products in China, such as Apple,” he added.
Reduced purchasing power
The increase in prices of components and technology products due to tariffs could reduce companies’ ability to finance their innovation, as they would have to allocate more resources to cover higher production and import costs.
Europe must wake up
In this new scenario, where does the European Union stand? What should it do to avoid continuing to lag behind in technology and innovation?
The EU should consider significantly increasing investment in technological research and development. Strategic sectors such as artificial intelligence, quantum computing, semiconductors and green technologies should also be strengthened.
There is no doubt that a more favorable environment for European technology companies and harmonization of digital regulations between Member States are needed to facilitate the development of European start-ups. “The European Union should seek strategic alliances with other technologically advanced countries, such as Japan, South Korea or Canada, and maintain open channels of dialogue with the United States on innovation and technology issues, despite possible tensions,” said José García-Montalvo, Professor of Economics and ICREA-Academia Fellow at UPF and BSE Research Professor.
