Trump tariffs poised to disrupt global secondary market as inevitable price rises feed through

This week’s Trump Adminstration bombshell of substantial global tariffs has sent ripples through various sectors of the global economy, with the secondary market for used and refurbished mobile phones standing among the most affected.

Industry analysts warn that these tariffs could lead to increased costs for refurbishers, significant supply chain disruptions, and shifts in consumer behavior, ultimately impacting the affordability and accessibility of pre-owned smartphones.

Escalating Costs for Refurbishers and Consumers

The US imports a significant portion of its smartphones and related components from countries now subject to elevated tariffs. China, a major hub for electronics manufacturing, faces a 54 per cent tariff on its exports to the U.S. This substantial increase is expected to have a pronounced effect on companies like Apple, which relies heavily on Chinese manufacturing for its iPhones.

According to a report by The Times, Apple may need to raise iPhone prices by approximately 43 per ent to offset the impact of these tariffs. This adjustment could see the price of the top-tier iPhone 16 Pro Max surge from £1,599 to around £2,300.

Gerrit Schneemann, a senior analyst at Counterpoint Research, suggests that while companies like Apple might absorb some of these costs in the short term, prolonged tariffs would likely necessitate price increases.

Schneemann stated, “I think if this sticks, then probably with the iPhone] 17 we could see a price hike.”

Supply Chain Disruptions and Market Realignments

The tariffs are prompting companies to reassess and potentially restructure their supply chains. Apple has been exploring production in countries like India, Malaysia, and Vietnam to mitigate risks associated with Chinese manufacturing. However, these nations are also subject to new tariffs—Vietnam faces a 46 per cent tariff—complicating relocation efforts.

The secondary market for used mobile phones relies heavily on the availability of affordable components for refurbishment. With increased import costs, refurbishers may struggle to source necessary parts, potentially leading to reduced supply and higher prices for consumers.

Neil Shah, co-founder of Counterpoint Research, estimates that Apple would need to raise its prices by at least 30 per cent on average to offset import duties.

Impact on Global Trade and Consumer Behaviour

The tariffs have broader implications for global trade dynamics. China has responded with retaliatory measures, including additional tariffs on U.S. goods and controls on exports of certain rare earth materials. These actions could further strain international relations and disrupt markets.

For consumers, the increased costs may lead to shifts in purchasing behaviour. Higher prices on refurbished devices could drive consumers toward alternative options, such as lower-end new devices or delaying upgrades altogether. This change could have a cascading effect on the secondary market, potentially leading to decreased demand and profitability for refurbishers and resellers.?

Conclusion

The imposition of tariffs  is set to have far-reaching consequences for the global secondary market for used mobile phones. Increased costs for refurbishers, supply chain disruptions, and shifts in consumer behaviour are among the challenges the industry faces.

As the situation evolves, players in the sector will need to explore new strategies to mitigate the impact of these tariffs on their operations and the broader market.