Chinese smartphone prices drop 45% in US as export volumes crash in June

Business Standard

5 days ago

Chinese manufacturers are sharply cutting prices on products shipped to the United States in a bid to stay competitive amid ongoing trade tensions. According to new data from China's General Administration of Customs, analysed by Nikkei Asia, the average price of smartphones exported to the US fell by 45 per cent in June compared to the same period a year ago.
Trump tariffs force exporters to slash margins
The reductions come as exporters attempt to absorb the impact of tariffs rather than lose ground in a key overseas market.
These price cuts come despite a recent agreement between Beijing and Washington to pause further tariff increases for 90 days to allow time for negotiations. Still, most Chinese goods continue to face a combined tariff rate of around 30 per cent, and smartphones remain subject to a 20 per cent tariff imposed earlier this year in response to the US fentanyl crisis.
Chinese consumer electronics see price drops
Smartphones have seen steadily declining export prices since April, reversing a brief plateau in March.
Other consumer electronics are following suit. Video game consoles recorded a 23 per cent drop in per-unit prices in June, while irons and pocket watches each declined by around 5 per cent. Out of 14 product categories reviewed, nine saw prices fall.
Nikkei noted that US consumers and businesses have continued to import Chinese products due to a lack of reliable alternatives in broader markets. However, even at lower prices, China's export volumes have slumped.
Apple accelerates India shift as China falters
Smartphone shipments to the US dropped 71 per cent in June. In April, exports of Apple Inc's iPhones and other mobile devices fell 72 per cent to just under $700 million —the lowest monthly figure since 2011, well below the overall 21 per cent drop in Chinese shipments to the US that month.
Meanwhile, Apple has accelerated the shift of iPhone manufacturing to India, its largest production hub outside China. Over the past year, China's exports of phone components to India have quadrupled, according to customs data.
US President Donald Trump has publicly criticised Apple's overseas manufacturing strategy and called on the company to bring iPhone production to the US.
Still, not all export categories are seeing price cuts. Fireworks exports rose by 51 per cent in June, recovering from a sharp 75 per cent plunge in May, likely the result of delayed shipments finally clearing customs. Prices also increased for alarm clocks and scissors.
US-China trade tensions persist
Despite ongoing talks, trade tension between China and the US remains high. Earlier this week, Beijing accused Washington of undermining recent trade talks in Geneva by imposing fresh sanctions on Huawei Technologies Co's artificial intelligence chips.
US Treasury Secretary Scott Bessent is expected to meet Chinese trade officials in Stockholm next week for two days of talks beginning Monday. The goal is to extend the tariff suspension beyond its current expiration on August 12.