By NEIL HARTNELL

and ANNELIA NIXON

Tribune Business Reporters

Bahamian electronics retailers were bracing for 45 percent price increases until Donald Trump - temporarily at least - exempted smart phones and laptops from punishing 145 percent tariffs on Chinese imports.

Mark A Turnquest, founder of the 242 Small Business Association and Resource Centre, as well as a consultant to many companies of that size, told Tribune Business that merchant clients and members who retail electronic goods had been preparing to “minimise their purchasing” and reduce the breadth of their inventory prior to the reprieve unveiled by the US administration late on Friday.

“Discussing it over the weekend with some of my electronics friends, clients and members, we are happy the US is not imposing any tariffs on Chinese cell phones, laptops and these types of electronics. They are exempted from these 145 percent tariffs,” Mr Turnquest said. “That’s good news.

“My electronic clients and members were very concerned, and saying the faced a 45 percent increase in prices. If this tariff, the 145 percent, was implemented they’d have to minimise their purchasing, reduce the width of their inventory, and be selective with how much inventory they purchase. That’s good news in relation to that.”

However, confusion and uncertainty is never far away with Mr Trump’s back-and-forth, on again/off again tariff policies. US Customs and Border Protection (CBP), in a late Friday notice, said products such as smart phones, laptops and computers would not only be exempt from the sky-high 145 percent levy on Chinese imports but also the 10 percent tariff imposed on all other nations and trading partners.

Exemptions were also included for components such as memory cards, solar cells and semi-conductors seemingly in a bid to ease the fears of US technology companies about a surge in imported input costs that would drastically impact the final product price for consumers. The Bahamas imports a significant amount of its electronic goods from the US which, in turn, sources multiple parts from tariff-hit economies.

However, no sooner had the exemptions for smart phones, laptops and computers been announced, Mr Trump and other officials suggested these waivers would be short-lived to immediately trigger fresh doubts for the sector. And the US is now launching an investigation into the semi-conductor sector ahead of plans to impose tariffs on national security grounds.

Craig Pyfrom, D.C. Technology’s principal, yesterday told Tribune Business that the uncertainty triggered by US trade and tariff policies has left his business scrambling to cut costs where it can. He voiced “extreme concern” over a policy that has left both himself and his suppliers holding their breath.

Describing it as a wait and see situation, Mr Pyfrom said his suppliers - who are based in the US - are hesitant to purchase more product amid fears they will be left with excess inventory should Mr Trump’s tariffs provoke a slowdown in consumer demand and potential economic recession.

“People are cutting back because they’re not buying ‘wants’, they’re buying ‘needs’,” Mr Pyfrom said. “That’s all their money. Everything is just getting so expensive already, and then when the tariffs really hit it’s going to be crazy. Some of my suppliers are also sceptical of ordering products because they don’t know with the tariffs if they’ll get stuck with it .

“So everything is up in the air right now, and I can see a big shortage of supplies. And to buy from China direct, the freight is crazy. So everything is wait and see. I mean, I do plan on seeing what I can get direct from wherever it’s made to avoid the tariffs. I think everyone is going to try that.”

Mr Pyfrom, who revealed that business has “been very slow”, added that he is selling electronics and electronic accessories, as well as providing technology services such as repairs, hoping to see a bigger profit. He said he is trying to cut costs where necessary, which has prevented him from hiring needed staffing and help.

“I’m extremely concerned,” Mr Pyfrom said. “Very concerned. The thing is, you just don’t know how bad it’s going to be. Is the Government going to reduce duties if this stuff goes up because they’d be making a lot more money.

“I’m shopping around better; trying to shop around to get a better price. And also turning off the air conditioning; anything to save electricity, anything I could do to cut costs - holding off on hiring. That’s another thing. I had plans to hire, and I’m holding off. I’ve got to cut back and wait and see if I could survive, as I think a lot of businesses would go out of business if this goes on.

“I know the computers and Apple iPhones, some are made in China. And they say they’re going to exempt them. I don’t know if it’s going to stay that way or what, but it’s just going to cost so much more for them to manufacture stuff in the United States. The labour cost is so much higher,” he added.

“So if they put this tariff on, that can hurt a lot of businesses, especially like my business. Toners and inks and printers, the majority of them, I’d say, 80 percent, I’m guessing, probably made in China. And it’s going to have a serious effect on everything.”

Mr Pyfrom also expressed concern over US plans to levy up to $1.5m per port call fee on Chinese-made ships. “And then there’s also the thing on Tropical Shipping, where the boat is made in China, and they want to charge $1m every time they touch the port. And they’ve got to pass it on to us, and that’s going to affect prices seriously,” he explained.

“Like the shipping cost is going to go sky high to a point where people aren’t going to buy it. It’s going to be so expensive. And then the thing is, I don’t know what the Bahamas government’s plan is, but some items are dutiable, like, say a speaker. If you buy a speaker, it’s 45 percent. You get some electronics at 35 [percent]. It’s just going to cost so much.

“So, for instance, something that was going to cost $100, first cost in the US. If they put this 145 percent on, that could end up being close to $300 first calls. Because when they put their margin on top of their tariff it’s going to increase more than just 145 percent. That might increase by maybe 200 percent. So it could be $300 first cost,” Mr Pyfrom continued.

“And then if I have to pay a tariff on that… unless the Government is going to make an adjustment to the tariffs because we pay tariffs on different things. I don’t know what’s the outcome of Tropical Shipping, and the owner, how his meeting went with them [the US government].

“But I understand they were going to make a decision on April 17 whether they’re going to charge this $1m to Tropical Shipping, and I don’t know how many other shipping companies. So it’s crazy, right now. Everything is chaos. It don’t look like China’s going to back down. I don’t know if Trump is going to back down. But I know the US dollar seems to be getting weaker.”