Some American companies are engaging in price gouging with local retailers ahead of the anticipated surcharge on Chinese goods coming to the island but shipped through the United States.

President Donald Trump’s tariff hikes on such Asian imports have not even taken effect, yet some Bermuda importers have been left scratching their heads over the increases charged by their US suppliers.

Kenneth Pemberton, the owner of Gear and Gadget, on Queen Street in Hamilton, revealed that some suppliers are attempting to take advantage of the confusion surrounding the timing of the new tariffs.

This month, the US administration established a tariff of 125 per cent on Chinese goods imported to America — including iPhones and other Apple devices — before increasing it to 145 per cent.

Later, he exempted smartphones and other electronics, but said it was only temporary.

“We have observed that some suppliers will increase pricing under the pretext of tariff hikes, even on stock they acquired prior to any policy change,” Mr Pemberton said. “This tactic creates artificial inflation, leaving small businesses like ours with little room to manoeuvre and price competitively.”

Gear and Gadget sells mostly electronics, but he anticipated a ripple effect from the tariffs on products across all categories.

The cost of electronic goods including computers, headphones, tablets and even appliances such as washing machines could go up from 10 to 15 per cent over the next year, costing the average American home an extra $3,800 a year, USA Today News has reported.

Alex Jones, the managing director of iRepair, on Washington Lane in Hamilton, said this could have an unexpected silver lining for Bermuda.

“If the tariffs stick around, we could end up in a situation like we had in the Eighties and Nineties, when many goods were cheaper in Bermuda than in the US,” Mr Jones said.

He said some Americans came to Bermuda at the time to shop for luxury items.

“That part of it could be interesting for Bermuda,” he said.

So far, Mr Jones has not experienced any price gouging, but said his goods come from Canada through a different supply chain.

“The biggest challenge for us will be supply chains becoming slower and less reliable,” he said.

Yesterday, NBC New York’s website revealed that the US dollar has fallen to its lowest point in three years, by 9 per cent since January.

Mr Jones thought that might spell bad news for the island.

“We could expect some significant fallout,” he said. “Local retailers could find it harder to import items. Many things, such as bulky items that cannot be sourced directly from China, will get more expensive.”

Tim Smith, the chief executive of A F Smith, said small price increases owing to modest tax increases could be managed and the impact contained.

“What is worrisome is the uncertainty surrounding the tariff rates and whether they will be so high as to cause consumers to stop buying the products,” he said.

The retailer was closely monitoring the tariff changes, particularly as they pertained to shipping, imports and the price of Apple products, which A F Smith sells.

“While most of our products import through the free trade zone in Miami, it is still unclear how these tariffs will impact our cost and, subsequently, consumer prices,” Mr Smith said.

Apple had reassured him that they are reviewing measures to reduce the impact of the tariffs, such as the consolidation of shipments.

“Undoubtedly, for a country like Bermuda that relies exclusively on imported products, the imposition of tariffs is never good news,” he said.