Genuine question on supply and pricing of GPU (and other parts) post "Liberation Day"

[Noughtboy]

As the title says, and probably @Gibbo may be able to give a more "insider" opinion, do we think the (potential) disruption of supply to the USA is going to land up being positive for those of us in Europe, Australia etc?

I am trying to get an exact date for implementation - 02/04/2025 is the date but under HTS (Harmonized Tariff Schedule) it may not come into effect until after 31/5/2025. Reading it, I don't think complete retail GPU's produced in China are covered and tariffs may come into effect on Wednesday but possibly not. Either way, can I assume that supply for the USA will likely get diverted to other parts of the world with less onerous tariffs post 02/04/2025 certainly boosting availability and possibly stabilising pricing (but not holding my breath on that one!)

This could also extend to other parts such as PSU, storage, monitors and even things such as TV's or...actually anything really.

Anyone have some thoughts or specific knowledge?

 

[ljt]

Or, instead of diverting stock, they will just raise the price everywhere to compensate for tariffs to the US, in effect subsidising the price rises to the US consumer by everywhere paying more instead..

 

[muon]

Or, instead of diverting stock, they will just raise the price everywhere to compensate for tariffs to the US, in effect subsidising the price rises to the US consumer by everywhere paying more instead..

That's not how tariffs work. US importers pay the 25%. No one outside raises the price. If they did, US importers will still pay 25% on the higher price.

 

[ljt]

That's not how tariffs work. US importers pay the 25%. No one outside raises the price. If they did, US importers will still pay 25% on the higher price.

Couldn't the manufacturers sell at a lower price to the US to counteract the tariff and offset their losses by increasing prices elsewhere as US is the biggest market?

 

[Noughtboy]

Theoretically yes. But, you do know the purpose of being in business is to sell at a profit. Not still it for a loss in probably their biggest single market and try to recoup some of that from the rest of the world.

I am not sure how the other countries would view that pricing strategy and not, for example, charge the manufacturers a tariff as well meaning that they now lose in both territories.

It would be easier for the manufacturer to maximise their utility by pricing the GPU (or PSU/CPU/TV) to sell at the price that maximises profit

 

[muon]

Couldn't the manufacturers sell at a lower price to the US to counteract the tariff and offset their losses by increasing prices elsewhere as US is the biggest market?

That would be very weird thing to do wouldn't it? Instead of raising prices across the board, as initially suggested, they would now be cutting prices into a market where everything is sold out.

 

[ljt]

I dont know, I'm just being pessimistic. I just can't see it benefitting us by diverting stock away from the largest economy like the OP was suggesting.

 

[Emlyn_Dewar]

100%, they will find a way to screw the rest of the world more than they already do, to help the US customers.

 

[Rogueywon]

Couldn't the manufacturers sell at a lower price to the US to counteract the tariff and offset their losses by increasing prices elsewhere as US is the biggest market?

This isn't how it works and the manufacturers would lose more money if they did this.

Prices are not set by accident. They are carefully calculated to extract the maximum possible profit, given a whole range of factors. If the manufacturer has done its homework right, then either raising or lowering the price will reduce its profits. If one country (the US) brings in tariffs, the price is no longer at the optimum point and profits will fall in that country. If the manufacturer seeks to "offset" this by raising prices elsewhere, all it will do is step away from the optimum price point in other countries as well, further reducing profits.

 

[Noughtboy]

This isn't how it works and the manufacturers would lose more money if they did this.

Prices are not set by accident. They are carefully calculated to extract the maximum possible profit, given a whole range of factors. If the manufacturer has done its homework right, then either raising or lowering the price will reduce its profits. If one country (the US) brings in tariffs, the price is no longer at the optimum point and profits will fall in that country. If the manufacturer seeks to "offset" this by raising prices elsewhere, all it will do is step away from the optimum price point in other countries as well, further reducing profits.

That is my take. So, back to the original question. Does anyone feel that US consumers will rein in their spending on GPU's and therefore manufacturers will divert some of that "excess" supply and some of that will find it's way over to our fair shores?

I will again ask @Gibbo is there have been discussions with manufacturers around that issue with the possibility of seeing an increase in GPU's in Blighty?

 

[Game]

Americans still dont understand this is a TAX on them not the people selling the good to the USA

Hockey Gear has now gone up 40% can you imagine the shock if you are a parent buying new hear every 6-12 months

 

[BUDFORCE]

Americans still dont understand this is a TAX on them not the people selling the good to the USA

Hockey Gear has now gone up 40% can you imagine the shock if you are a parent buying new hear every 6-12 months

Yea but the idea is it forces them manufacturer the stuff in house, or that's Trump's idea anyway.

 

[Author_25]

That is my take. So, back to the original question. Does anyone feel that US consumers will rein in their spending on GPU's and therefore manufacturers will divert some of that "excess" supply and some of that will find it's way over to our fair shores?

I will again ask @Gibbo is there have been discussions with manufacturers around that issue with the possibility of seeing an increase in GPU's in Blighty?

US consumers have not felt the full effects, yet of the tariffs, as a lot of importers stockpiled before the first tariffs set in, but as the weeks pass the US consumer will feel the effect, especially on cars and electrical goods, including GPUs, and so many will either reign in there spending opting not to buy or getting a cheaper card. In the end Europe and Aia may benefit as AMD and Nvidia seek to offload unused US stock, but that depends hoe badly the tariffs hit them.

Britain and Europe are probably going to see some rises but not the same level as the US, as cards shipped from Asia will not be hit with tariffs, unless, they go through the USA, so prics should be stable for the moment.

Nvidia will probably feel the pinch worst as there cards are already over priced and AMD may see a bump as there cards tend to be cheaper and the 9070/9070XT, arrived at the right time offering a good price to performance, that the 5070 and 5070Ti fail to do, so may see greater demand.

Given Trumps erratic behaviour though who knows what will happen and it may be best to get a GPU or other PC parts now.

 

[Rogueywon]

In the short term, I don't expect much of an impact at all in the UK. We've seen the RRP of the 5090 drop a little due to the fall in the value of the dollar, but availability means that the price remains largely theoretical. I don't expect a flood of extra stock into the market. Early buyers of cards like the 5080 and 5090 aren't all that price sensitive, so I wouldn't expect to demand to drop quickly in the US due to tariffs. That may change over time, though, as Nvidia may see sales tail off faster in the US as the year goes on, particularly if consumers there are getting squeezed more widely.

It gets more interesting in the longer term, if Trump doesn't change course (or get impeached, which could well happen if too many Republican senators see their re-election chances scuppered by inflation). The value of the dollar may continue to fall, which seems to be one of Trump's objectives. That could mean lower prices for us, as components are priced in dollars... or quite plausibly, components will start being priced in something other than the dollar (the Euro or the yuan perhaps).

 

[rare]

Feel like we’ve reached a ceiling with a lot of parts as it is. Not sure they can realistically get much more expensive without it seriously impacting sales.

 

[Noughtboy]

US consumers have not felt the full effects, yet of the tariffs, as a lot of importers stockpiled before the first tariffs set in, but as the weeks pass the US consumer will feel the effect, especially on cars and electrical goods, including GPUs, and so many will either reign in there spending opting not to buy or getting a cheaper card. In the end Europe and Aia may benefit as AMD and Nvidia seek to offload unused US stock, but that depends hoe badly the tariffs hit them.

Britain and Europe are probably going to see some rises but not the same level as the US, as cards shipped from Asia will not be hit with tariffs, unless, they go through the USA, so prics should be stable for the moment.

Nvidia will probably feel the pinch worst as there cards are already over priced and AMD may see a bump as there cards tend to be cheaper and the 9070/9070XT, arrived at the right time offering a good price to performance, that the 5070 and 5070Ti fail to do, so may see greater demand.

Given Trumps erratic behaviour though who knows what will happen and it may be best to get a GPU or other PC parts now.

I am not so sure Nvidia is concerned with the price of their cards. I think they view dGPU as a necessary evil as they would rather use the silicon to produce AI GPU's as the margins are greater and companies less price sensitive - not entirely but less so. US would be silly to tariff them as firstly, they cannot produce them onshore and secondly, should companies (read AMD and Nvidia) get targeted with sanctions for supplying elsewhere (read China), those cards will all be sold with a lot going to China and US companies unable to forge forward in the AI race. Is DJT just going to sanction the entire world at 100%/150% etc for minding their own backyard.

Sure America is a fairly open economy compared to other nations but most of the larger economies are skewed towards services and healthcare. I could expand further but that really isn't the focus of this question.

Ultimately, I am just trying to get a logical or informed decision without an opinion on the merits or otherwise of the tariffs and the along the lines off the above on the effect on availability of PC parts in general, GPU's in particular. I don't want to derail this into a entire thread on the world economies or will probably be moved into GD or SC.

 

[Jacky60]

The only thing consumers anywhere in the World will experience is higher prices and the vast majority of companies will see higher margins. A rising tide (of rampant gouging and profiteering) lifts all boats.

 

[Jacky60]

In the short term, I don't expect much of an impact at all in the UK. We've seen the RRP of the 5090 drop a little due to the fall in the value of the dollar, but availability means that the price remains largely theoretical. I don't expect a flood of extra stock into the market. Early buyers of cards like the 5080 and 5090 aren't all that price sensitive, so I wouldn't expect to demand to drop quickly in the US due to tariffs. That may change over time, though, as Nvidia may see sales tail off faster in the US as the year goes on, particularly if consumers there are getting squeezed more widely.

It gets more interesting in the longer term, if Trump doesn't change course (or get impeached, which could well happen if too many Republican senators see their re-election chances scuppered by inflation). The value of the dollar may continue to fall, which seems to be one of Trump's objectives. That could mean lower prices for us, as components are priced in dollars... or quite plausibly, components will start being priced in something other than the dollar (the Euro or the yuan perhaps).

There aren't going to be any more US elections. Our prices do not go down apart from Nvidia website permanently out of stock.

 

[Tythus]

Couldn't the manufacturers sell at a lower price to the US to counteract the tariff and offset their losses by increasing prices elsewhere as US is the biggest market?

to compete against who? AFAIK all gpu manufacturers will be hit with this so why would they eat any cost? and if they make ROW more expensive congratulations you've just sacrificed all of your region sales to everyone else (eu/canada/oceiana/asia)

 

[Game]

once the Canadian boycotts hit about 500k Canuks less visited the USA in march compared to last year

one bridge on the border had 100k less crossings than normal

some Maine hotel owners on the BBC said nearly every single holiday booking that had this summer had been cancelled , and normally its the same people every year who book the rooms