New TVs and Trump's Tariffs: Time to Buy a TV Now?

Spring brings not just showers but also a slew of new TVs every year as major manufacturers reveal their latest models in full bloom. So is this a good time to buy a TV — or should you wait?

With the threat of new tariffs looming, the answer this year is more complicated.

New tech or deals on last year's models?

The first consideration for shoppers is whether they want to get the latest technology offered in new TVs or settle for deals on older sets as last year's models get discounted to make way for the new offerings. If there aren't that many significant improvements, choosing an older model can easily save you several hundreds of dollars. But this spring, we're seeing visible improvements in picture quality in new 4K Ultra HD TVs.

"This year, there has been a big step up," confirmed Paul Gray, director of research and analysis at IHS Markit. In an interview at the IFA Global Press Conference, Gray said manufacturers have been focusing in particular on contrast ratios, revealing more in shadowy pictures and bringing out subtle image details.

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"There's a lot more use of full-array local dimming backlights," Gray said. Vizio's newest flagship model, the 65-inch P-Series Quantum, for example, has 192 local dimming zones, which helps improve picture detail.

Are prices going down or up?

The other major criterion in making a TV buying decision is that, historically, prices drop on LCD and OLED sets later in the year, especially during the holiday buying season. This year may be very different.

President Donald Trump has proposed a 25 percent tariff on many Chinese goods and raw materials. And while some or none of those added levies may materialize, analysts say that if they do, consumers will pay more — particularly for HD and 4K TVs.

"There will be no grace period," said IHS Markit's Gray. "And these costs will be passed along to consumers."

At the IFA Global Press Conference, Chinese TV makers TCL and Hisense didn't want to comment on possible tariffs. But analysts agree prices for consumers would rise — and rise sharply. Because the profit margins are so narrow and the competition among manufacturers is so tough, "it's unlikely TV makers could absorb the cost," said Gray. So companies would have to pass along the 25 percent increase to consumers.

The tariffs would also disproportionately hit low-end bargain sets — such as those from brands like Insignia, Hisense and TCL — where some manufacturers already make little or no money. According to research by IHS Markit, the price of a 30-inch monitor that currently costs $143 would jump $47. The price of an inexpensive, $400 50-inch 4K model would jump a whopping $100, and the price of a 55-inch set would jump $125.

Which brands would suffer?

The application of tariffs aimed at China are based on so-called rules of origin (rather than on every individual component in the display). So some brands from other countries — such as models from Korean companies like Samsung and LG, or from Japanese companies like Sharp and Sony — could escape any price increases.

Unfortunately, the rules of origin aren't always clear. High-end TVs from Samsung and LG, for example, are often assembled in Mexico, and the White House has threatened to impose new taxes on products coming from south of the border. So those TV sets could still be subject to new tariffs.

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Sascha Lange, who oversees Sharp sales in Europe and who introduced the company's first 8K set at the IFA press conference, said that the company didn't need to worry about such issues in Europe. However, TVs with the Sharp brand in the U.S. are actually made and marketed by Chinese company Hisense. So, Sharp TV prices in America could see a price jump as well.

No warning

While no tariffs have been officially imposed and the administration has set no clear dates for when they would come into effect, TV prices could jump immediately after the hikes are set. There's not a lot of old inventory sitting in stores, and supply chains are short, so you shouldn't expect to be able to get a last-minute deal when tariffs hit.

"There will be no grace period," said IHS Markit's Gray. "And these costs will be passed along to consumers."

Furthermore, while there are some things TV makers could do to offset the tariffs — such as acquiring factories in other countries or shifting assembly to the U.S. — making such changes could take years.

Bottom line

Consequently, if you're planning on buying a new TV this year, don't wait. The latest 4K Ultra HD models can deliver significant picture improvements over last year's sets. And rather than seeing prices drop later in the year, they could rise steeply, by as much as 30 percent for value-priced sets. You've been warned.

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