Tariff Threats Hit IT: IBM Raises Prices As Gigabyte Sees Possible Hike
Two IT vendors are already warning their channel partners about supply chain price increases or the potential for such increases due to planned tariff actions by the Trump administration.
IBM in late July told its business partners that it raised the prices for a wide range of its tape drives and related products by 25 percent due specifically to tariffs put in place on certain imports from China.
And Gigabyte, the Taiwan-based manufacturer of a wide range of IT products from keyboards and mouse pads to servers and PCs, told its solution provider and system builder clients that it may raise prices by 10 percent this month depending on the outcome of talks between U.S. and Chinese officials.
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IBM storage executives did not provide any further information about its price increase to CRN by press time. Gigabyte spokespeople did not reply to a CRN request for more information by press time.
IBM last month sent a memo to its business partners entitled “Price Change(s): China Tariff Increase Resulting In Price Increase on Selected Tape Products.” The memo, which was examined by CRN, said that new prices for tape automation and related products ordered starting July 24 were raised by at least 25 percent.
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The memo included a list of 137 products affected by the price rise — ranging from $19 power cords to tape drives such as the IBM TS1155 model 3592 FFE Ethernet-based tape drives, which list at $65,125. The prices for these two products are the post-tariff-related prices.
For most products on the IBM list, the price increase was 25 percent. However, for a few products, the price increase was 26 percent or 27 percent. In particular, all the products originally priced at $15, including the power cords, are now priced at $19, an 27-percent increase.
Prices were not raised for products ordered before July 24, or for products covered by existing IBM volume commitments or special bids.
Gigabyte, with U.S. headquarters in City of Industry, Calif., warned channel partners that a number of its products may be heading towards a 10-percent price increase, depending on the outcome of the final actions of the U.S. Trade Representative, or USTR, on Section 301 action.
According to the USTR, the organization initiated an investigation under Section 301 of the Trade Act of 1974 into China’s trade policies.
“However, please note that the tariffs will not go into effect immediately, but will be under a two-months review process, with hearings on August 20-23 by USTR,” Gigabyte wrote in its memo.
Gigabyte said its motherboards, graphics cards, SSDs, mouses, keyboard/mouse bundles, CPU coolers, power supplies, and chairs are subject to a potential 10-percent tariff. However, its PCs, servers, notebooks, keyboards, memory, headsets, PC cases, and mouse pads are not subject to the price increase.