Chinese tech firms up their game as reciprocal tariffs hit U.S. products

Yahoo

19-04-2025

HONG KONG — Marcus Wu's home racing simulator setup needs one more thing: a manual gearshift. A decade ago, one from a Western brand would have been a no-brainer for gamers like the 12-year-old Hongkonger.
As President Donald Trump's trade war with Beijing escalates, the fact that Wu opted for a gearshift from Chinese manufacturer Moza illustrates how far Chinese manufacturers have come in competing with their Western counterparts on affordability and quality.
The deepening economic conflict between the U.S. and China, the world's two largest economies, has the potential to wreak havoc on a complex web of globalized commerce. And Trump's attempts to claw back manufacturing to American shores could have unintended consequences, including giving Chinese technology manufacturers an edge at a time when American products are already becoming expensive.
Wu and his father-cum-financier, Mingfai, have already made their choice, opting for a Chinese alternative over American brands such as the Oregon-based Thrustmaster. 'If only the price was good but the quality wasn't, then I wouldn't have bought this,' the elder Wu said. 'But this is cheaper and works great.'
The duo were browsing Hong Kong's Sham Shui Po computer market — a sprawling hub of small tech stores selling everything from computer parts to gaming equipment for casual gamers and enthusiasts alike.
To residents and tourists from mainland China — a country with a gaming market of half a billion users — the market is a one-stop shop, featuring top American brands including Dell, Corsair and the Nasdaq-listed Swiss manufacturer Logitech.
Those are just some of the companies competing for market share in a gaming industry that accounting firm PricewaterhouseCoopers estimates will be worth $300 billion by 2027. According to China's Game Industry Report, China's gamers contributed $44 billion in sales revenues to the industry last year.
To be sure, Western brands are still popular when it comes to big-ticket items like monitors, processors and storage devices, but sellers at the market told NBC News that Chinese brands have been knocking it out of the park when it comes to accessories, like mice, keyboards and simulator setups.
'So many Chinese manufacturers popped up after the pandemic,' said Dennis Leung, a sales assistant at a store that specializes in gaming peripherals. 'They often provide an extremely cheap and bargain price compared to the whole market,' he said.
Standing in front of a table of 30 mice, Leung held up two with identical feel and weight. The Chinese option, which was cheaper and more powerful, had been outselling its Western counterpart, he said.
The Trump administration last week issued a memorandum saying that electronics including computers, smartphones and some components will be temporarily exempt from levies imposed on Chinese imports.
But Trump's indication that duties on semiconductors and other technology could be on their way means it's still unclear whether electronics could get more expensive in the U.S. and whether prices of American-made products could go up for the rest of the world, too.
That uncertainty may already be causing nervousness at companies such as Dell — the $56 billion tech giant has a 20% share of the global gaming market — as well as the $12 billion market cap for Logitech and specialists such as Corsair, which is worth $630 million.
The administration's market-roiling tariffs come at a time when the quality of Chinese products has already vastly improved. That's giving Hong Kong's vendors a chance to capitalize.
When it comes to buying gaming accessories, shoppers don't really care where the end product is coming from, Kira Fong, manager of another store in the market, told NBC News. 'Most people just look for quality. They still want the best equipment,' he said.
Analysts expect Chinese-made tech products only to get better.
'People are choosing more Chinese-made products in each industry, not just personal computers, gaming, smartphones or electric vehicles,' said Xiao Feng Zeng, who analyzes China's gaming and esports industry at Niko Partners, an Asian and European gaming intelligence firm.
'Their quality is better and the price is cheaper,' the Shanghai-based vice president said, adding that Trump's policies will hurt America's ability to compete for young gamers.
The policies of the president, who refers to himself as 'Tariff Man,' are already feeding through into higher prices.
Hyte, a gaming PC sister brand of the California-based iBuyPower, said this month on X that while it was standing by increased prices, those prices will not be sustainable long term.
That was not a problem for Marcus Wu, and more importantly his dad, at checkout at the Sham Shui Po market.
With his son excited to go home and play with his new gearshift, Mingfai Wu breathed a sigh of relief.
'It's Chinese,' the elder Wu said. 'That's why it's cheap and good!'
This article was originally published on NBCNews.com