Warns of the Negative Impact of Trump Tariffs
This past Sunday, on the eve of this week’s launch of the Consumer Electronics Show (CES) 2025, the Consumer Technology Association (CTA) released updated projections for total Tech industry sales in the year, as is its custom. According to the trade association, total Tech industry sales are expected to reach $537 billion – the highest level in history.
Read more on CTA projections for total Tech sales in 2025
The CTA projects that industry sales will grow in 2025 by 3.2% overall to its highest level since 2020 – in fact, the highest level of industry sales ever! This is a very happy announcement as the tech industry gathers to celebrate all things Tech at the annual CES 2025 show running Tuesday, January 7, 2025 – Friday, January 10, 2025, at various venues around Las Vegas, NV.
The new projection is likely to be well received as the industry has struggled to return to a growth track in the wake of 2020’s global pandemic. The association released a graph showing a four year period of actual results running from 2020 – 2023, with a new estimate for 2024 and an all-new projection for 2025.
A Welcome Rebound in Industry Sales is Projected
The data showed that after a jump in industry sales in 2021 during COVID to $528 billion, industry sales declined in both 2022 (-2.6%) and 2023 (-2.7%) where it dropped to a low of $508 billion. Now the association says its data indicates an “estimated” rebound in 2024 to $520 billion (+2.5%), which will be followed by an even more robust “projection” of growth to $537 billion (+3.2%) in 2025.
CTA says that this result signals a return to “growth in consumer spending on both tech products and services.” The data is encapsulated in its report on results titled U.S. Consumer Technology One-Year Industry Forecast.
The report projects growth in the sales of Hardware of 2.6% and Software & Services growth of 4.6% for an overall 2.6% rate of growth.
CTA Issues a Dire Warning on the Trump Tariff Plan
But the CTA added a dire warning that these numbers could change – and change drastically – based on President-Elect Trump’s tariff plan. According to the association, the administration’s tariff plan threatens to hurt sales of tech products consumers love, such as smartphones and laptops.
In fact, the trade group has drafted a report on the issue titled, How Proposed Trump Tariffs Increase Prices for Consumer Technology Products. From the report, we learn:
- Tariffs on technology products could lead to a $90-$143 billion decline in U.S. consumer purchasing power.
- Purchases of laptops and tablets could decline by as much as 68%, consumption of gaming consoles could decline by as much as 58% and consumption of smartphones could decline by up to 37%.
The Tech Sector is ‘America’s Economic Engine’
The organization is clearly sounding the alarm, and making industry participants aware of a looming danger, both to our industry specifically and to the greater overall U.S. economy.
The tech sector is America’s economic engine, driving global innovation and job creation. Our positive forecast reflects the industry’s strength, but proposed tariffs threaten the deflationary power of tech in the global economy. Tariffs are a tax on American businesses and consumers. We urge the incoming administration and Congress to prioritize an Innovation Agenda that fosters growth.
Gary Shapiro, CTA CEO
U.S. Trade Policy Should Protect Consumers and Help American Businesses
The trade association’s trade specialist joined in to amplify Shapiro’s comments.
The incoming administration must address how tariffs impact American businesses and consumers. Retaliation from our trading partners raises costs, disrupts supply chains, and hurts the competitiveness of U.S. industries. U.S. trade policy should protect consumers and help American businesses succeed globally.
Ed Brzytwa, CTA Vice President of Trade
Learn more about the CTA and its programs by visiting cta.tech.
Do you seriously believe that purchases of laptops and tablets could decline by as much as 68%?
Hi Flavio,
I have no idea. I’m just reporting what the CTA study says. However, CTA is not the only organization warning of the dangers of the tariff plan proposed by the administration. If the economy is upended, then many think all bets are off, with inflation reigniting and causing a consumer spending collapse.
I don’t have enough details to say whether I believe this is likely…or even possible. But it is an opinion held by many.
Ted