Tech companies big and small are offering bold visions of artificial intelligence-infused products that could be headed into our everyday lives soon. Unless tariffs trip them up.
That’s the message from the head of the Consumer Technology Association, which is holding its annual electronics show in Las Vegas weeks before Donald Trump returns to the White House on a campaign promise to dramatically raise tariffs — also known as import duties or levies — on goods coming into the U.S. from abroad.
The president-elect has promised surcharges of at least 60% on products coming in from China, a 25% tariff on Mexican and Canadian imports, and blanket tariffs of 10% to 20% on goods from virtually every other country.
“The most beautiful word in the entire dictionary of words is the word ‘tariff,’” Trump said on the campaign trail, pledging to reshore companies and spur more domestic manufacturing.
Economists, however, say the most likely outcome of higher tariffs would be price increases for consumers as companies that manufacture or source parts from abroad pass along higher costs to buyers. Federal Reserve officials are also weighing concerns that Trump’s trade policies could fuel inflation.
One of the tech companies exhibiting at CES is Yarbo, which makes a lawn-care robot that offers to map a yard and snow-blow it autonomously. It’s also modular, meaning it can transform into an autonomous lawn mower to trim grass in the spring and summer.
The New York-based company manufactures the product in China. Co-founder Kenneth Kohlmann said Trump’s tariff agenda is a big question mark for Yarbo.
“We have plans for that if that does happen. It’s anyone’s guess what tariffs will be applied to what,” Kohlmann said, adding that the company could shift its supply chain to blunt the impact of any Trump action.
But many small businesses, including those that weathered the duties Trump imposed during his first term in office — most of which President Joe Biden preserved — say their ability to adjust to further tariffs is limited or nonexistent. In the weeks after the election, some operators shook up their plans for 2025, placing rush orders or looking for cost cuts.
And while some analysts have voiced skepticism that Trump will execute all the trade policies he’s proposed, the CTA, which represents consumer-facing tech companies, is already warning that customers would pay the price for higher tariffs.
“It’s like being concerned about the weather: Everyone talks about it but nobody can do anything about it,” said CTO CEO Gary Shapiro. Still, he predicted, “If you have the type of tariffs that President Trump was talking about, we will have a Great Depression.”
The CTA issued an analysis in October estimating that Trump’s tariff proposals would drive up average prices for laptops by $357, smartphones by $213 and televisions by $48.
“If countries see that we’re putting tariffs on the products, they’re going to reciprocate,” Shapiro said, nodding to the cycle of retributive levies Washington and Beijing lobbed at each other during Trump’s first term. “They’re going to go retaliatory against us, and that’s something which is really harmful to not only Americans but to innovation.”
Businesses in a range of industries were forced to adapt to those tariffs. In some categories, like electric vehicles, the Biden administration even moved to hike tariffs further to address concerns about Chinese green tech edging out U.S. competitors.
While the CTA has slammed Trump’s tariff plan, it welcomes lighter regulation under the incoming administration.
“Investment should go up in smaller businesses, which is great for the economy under President Trump,” Shapiro said.
The group also backs a change in leadership at the Federal Trade Commission, helmed by Biden appointee Lina Khan. Under Khan, the FTC attempted to crack down on large mergers but failed to convince the courts to stop large transactions, including the Microsoft-Activision Blizzard deal. Trump announced he would replace her with Andrew Ferguson, a Republican who currently serves as an FTC commissioner.
There is reason to believe Trump may not wind up implementing every tariff proposal he has put forward.
“Tariffs are a — properly used, are a very powerful tool, not only economically, but also for getting other things outside of economics,” the president-elect told NBC News’ Kristen Welker last month. He has indicated he sees duties as a negotiating tool to secure other countries’ help restricting immigration or policing fentanyl trafficking.
For now, that has left some tech companies guessing about how to prepare.
“I don’t really think they’ll be applied to a product like this,” Kohlmann said of his Yarbo snow-blowers. “But they might be.”