What You Don’t Know About Greedflation in the Electronics Supply Chain

Article Highlights:

• In many cases, new tariff costs being absorbed by suppliers and other importers are being passed downstream, driving up prices for original equipment manufacturers (OEMs) and consumers alike. But there’s also a growing sense that some companies are using the same deceptive tactics employed during the COVID-19 pandemic to widen their profit margins. 
• In many cases, it isn’t the OEMs who are using tariffs, or some other emerging economic pressure, as a rationale for raising prices—it’s the manufacturers further up the supply chain. 
• Fortunately, OEMs and other U.S. importers have strategies at their disposal for pushing back against disingenuous tariff narratives in their supply chain. In order to effectively call out suppliers, though, businesses need the data and insights critical to countering those claims. 

In 2022, after two years of the COVID-19 pandemic, inflation started to strike the U.S. economy. Supply shortages, rising costs for materials, and a worldwide shipping container crisis—among other factors—drove up the price of goods. By June, inflation had soared north of nine percent. At 6.5%, the average rate for 2022 was the highest figure for the U.S. economy in over 40 years. 

Over the next two years, economists, policy experts, and think tanks started digging into the data, in an effort to understand the specific causes that gave rise to the generational inflation levels faced in 2022 and 2023. In some cases, researchers found that price increases couldn’t always be explained solely by rises to the costs of materials, manufacturing, and transportation. In other words, at least some of the price increases Americans were forced to grapple with in 2022 and 2023 did not stem from corporations scrambling to cover their own costs. Rather, some companies were actually using the omnipresent inflation narrative as a cover to raise their prices—even if doing so was not actually necessitated by increases in their own overhead. 

By the fall of 2022, a new term entered the vernacular, one that endeavored to capture how some companies were exploiting the widely accepted storyline of runaway prices to bolster their own bottom lines: “greedflation.”

What Is Greedflation?

The term “greedflation” refers to the practice of corporations using inflation as a smokescreen to raise their prices in the interest of increasing profits. The Atlantic defines greedflation as “the idea that corporate greed, via excessive markups, is responsible for the pandemic-era price increases.” While there has been much debate about the extent to which greedflation has been a major factor in the prolonged period of inflation that began toward the end of 2021 and peaked in 2022, a slew of papers published over the past two years testify to its legitimacy. 

• A 2023 paper written by several economists at the University of Massachusetts, Amherst, asserted that “the US COVID-19 inflation is predominantly a sellers’ inflation that derives from microeconomic origins, namely the ability of firms with market power to hike prices.” The UMass economists pointed to record profits for U.S. corporations in 2021 and 2022, a trend that paralleled the rise of inflation in ways that strongly suggested the firms were using those market dynamics to maximize profits. The paper goes on to point out that other potential explanations for the inflation of the 2020s—including a sustained surge in demand or rapidly climbing wages—were comparatively weaker from a statistical perspective. 

• A comprehensive study carried out by two think tanks, IPPR and Common Wealth, in the same year found similar results. The report analyzed financial statements from over 1,300 companies all over the world, and found that the companies’ profits “increased at a much faster rate than costs did.” Profits for some of the world’s largest corporations increased by 30% between 2019 and 2022—numbers that strongly suggest a greedflation phenomenon. 

Greedflation in the Electronic Supply Chain Today

While many people might have hoped that “greedflation” was unique to the pandemic era—an isolated instance of price-gouging hiding behind larger macroeconomic trends—the reality is that the practice may not be completely behind us. This year, U.S. and global markets alike have been roiled by the tariff regime established by the new Trump administration. With import taxes intermittently implemented against China, Mexico, the European Union, and myriad other nations, U.S. supply chains are again confronting significant price pressures. 

While many people might have hoped that “greedflation” was unique to the pandemic era—an isolated instance of price-gouging hiding behind larger macroeconomic trends—the reality is that the practice may not be completely behind us.

It would stand to reason that the new tariff costs being absorbed by suppliers and other importers are being passed downstream, driving up prices for original equipment manufacturers (OEMs) and consumers alike. And while that may well be true in some cases, there’s also a growing sense that some companies are using the same deceptive tactics employed during the COVID-19 pandemic to widen their profit margins. In a letter to Secretary of Commerce Howard Lutnick sent in March, Senator Elizabeth Warren warned that President Trump’s tariff regime could be “giving big corporations a new set of excuses to price-gouge American consumers.” Warren cited Federal Reserve Chairman Jerome Powell, who himself observed during a press conference weeks earlier that prices had recently gone up on dryers—even though it was only washing machines that had actually been tariffed. Manufacturers, Powell said, “just kind of followed the crowd and raised [prices].”

One high-profile recent example of what some have characterized as greedflation is Sony’s decision to raise prices on its PlayStation 5. The Japanese electronics manufacturer raised the price of its flagship video game console by over 10% in the United Kingdom, Europe, and Australia, citing the “backdrop of a challenging economic environment, including high inflation and fluctuating exchange rates.” While U.S. tariffs were not explicitly mentioned, it’s plausible that Sony is taking measures to “get ahead” of new impending costs—a common way companies now contextualize price increases. 

In many cases, however, it isn’t the OEMs who are using tariffs, or some other emerging economic pressure, as a rationale for raising prices—it’s the manufacturers further up the supply chain. Already this year, there have been anecdotal reports of suppliers justifying price hikes on electronic components and subassemblies through tariff costs, even when their OEM customer is fully aware that they didn’t pay any new import taxes on those goods. The electronic supply chain is one of the most intricate, multifaceted manufacturing networks in the world, and some tier 1 suppliers appear to be leveraging that complexity to their advantage by framing price increases as the consequence of a more expensive trade environment. 

Already this year, there have been anecdotal reports of suppliers justifying price hikes on electronic components and subassemblies through tariff costs, even when their OEM customer is fully aware that they didn’t pay any new import taxes on those goods.

Mitigation Measures to Battle Greedflation

Fortunately, OEMs and other U.S. importers have strategies at their disposal for pushing back against disingenuous tariff narratives in their supply chain. In order to effectively call out suppliers, though, businesses need the data and insights critical to countering those claims. 

• Multi-Tier Mapping: Original equipment manufacturers that are able to see into their sub-tiers have the ability to cross-reference claims made by their direct suppliers regarding tariffs, country of origin (COO), and other sourcing information. For example, if a tier 1 supplier says that they’re raising prices on components because of U.S. tariffs on China, an OEM with comprehensive supply chain visibility can look into their sub-tiers and confirm whether or not their suppliers are actually sourcing from China. If they’re not—or if they’re only sourcing some parts from China, but using those as a cover to raise prices on all their parts—that data functions as a powerful form of leverage. Sub-tier supply chain visibility is one of the most potent tools businesses have in verifying tariff costs upstream, and counteracting supplier greedflation. 

• Current and Historical Tariff Rates: In addition to comprehensive supply chain visibility, OEMs can also give themselves a competitive edge by developing a thorough grasp of current and past tariff rates. While the Trump administration has intermittently imposed substantial tariffs on China over the course of 2025, the U.S. government already had levies on a number of Chinese imports—including a 50% rate on semiconductors—before the Trump administration was installed in January. Tariffs didn’t just start with the current executive branch of the U.S. government. Companies that can put current tariffs in a larger historical context will be able to challenge price increases on imports that were subject to import taxes before the recent wave of tariffs. 

Challenge Greedflation With Z2Data’s SCRM Software

As if it wasn’t enough that U.S. importers and original equipment manufacturers (OEMs) have to navigate a new era of tariffs and the price increases they may soon be ushering in, firms must also be on guard for suppliers looking to exploit this geopolitical development for their own financial ends. Following the latter years of the COVID-19 pandemic, greedflation has now been established by economists and other experts as a highly credible phenomenon, and there’s evidence that it’s reemering in 2025.

Supply chain risk management (SCRM) platform Z2Data can give organizations the tools critical to combating attempted price-hikes by suppliers. The SCRM software helps OEMs and other firms use data, insights, and comprehensive historical context to push back against upstream manufacturers.

• Pricing data for over 1 billion parts.
• Comprehensive pricing histories that can help companies examine the cost of components over time.
• Cross-reference search capabilities that allow users to compare costs across parts with similar form-fit-function (FFF).
• Supply chain mapping and multi-tier visibility, giving businesses the intelligence to verify tariff claims.

The intelligence and analysis offered by Z2Data gives organizations the leverage they need in a dynamic 2025 supply chain environment. To learn more about how the Z2Data platform can help your business recognize greedflation in your supply chain and counteract those supplier tactics, schedule a free demo with one of our product experts.