Will Garmin watches get more expensive after Trump’s new tariffs?
Garmin watches might be getting pricier due to new tariffs introduced by Donald Trump. The additional taxes on imports from China, Mexico, and Canada could increase costs for the company, leading to price hikes for consumers both in the US and abroad.
Why this could hit Garmin prices
Garmin has done a fairly decent job at keeping its smartwatch and fitness tracker prices steady over the years. Sure, there are a few exceptions but on the whole pricing has remained stable.
The company makes its watches in a few different places, including Taiwan, China, and the US. But, as is the case with most wearable manufacturers, a good chunk of its manufacturing happens outside the US. And this is where things get tricky.
It is estimated the company has some 5,000 employees in Taiwan and the US each. Another 2,000 or so are spread in a few different countries – according to Garmin’s recent Annual Report.
The newly introduced tariffs by the Trump administration slap an extra 10% tax on Chinese imports and a hefty 25% on goods from Canada and Mexico. If Garmin is bringing in parts or finished watches from any of these places, that extra cost could be passed on to customers.
Companies in this situation have a couple of choices: either eat the extra cost themselves (which no company loves doing) or raise prices to make up for it. So, like with other goods, there’s a decent chance we’ll see those prices go up.
What this means for buyers
If Garmin decides to pass on the cost of these tariffs, US consumers could see higher prices on their favourite wearables. This would be similar to past situations where tariffs on electronic goods led to price hikes. Retailers might try to soften the impact by offering discounts or promotions, but over time, prices are likely to creep up.
Another possible effect is that Garmin could shift more of its production to Taiwan or even expand manufacturing in the US to avoid the tariffs. But moving production takes time and money, meaning price increases would still be likely in the short term.
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Customers outside the US should also feel an impact. Granted, they already pay a premium as compared to watches sold in the US. But an additional factor to consider is the potential for retaliation from China, Mexico, and Canada. If these countries impose their own tariffs on US goods, this will lead to additional price hikes for consumers in these countries.
Will Garmin adjust its manufacturing strategy?
With ongoing trade tensions, Garmin might consider shifting production to avoid the worst effects of tariffs. The company already has manufacturing facilities in the US, but ramping up production domestically would take time and might not be a cost-effective solution. Taiwan could also play a larger role in Garmin’s manufacturing strategy, given its existing production capacity.
For now, it’s unclear how the situation will play out and how other countries will respond. It is also also unclear how exactly this will effect Garmin.
If the company absorbs any additional costs, buyers might not see immediate price increases. But if Garmin decides to pass those costs along, consumers should expect to pay more for their smartwatches in the near future both in the US and abroad. It will be interesting to see how this plays out.
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