How the IT Industry is Staying Ahead of Tariffs
New U.S. tariff policies on Chinese imports are raising costs and reshaping the IT supply chain. Here’s how recent changes could impact your IT budgets and what to do about it.
In a dramatic shift that’s already rippling through the global economy, the United States has imposed a new round of tariffs targeting approximately $18 billion in Chinese imports. Among the hardest hit? The technology sector—specifically, the IT infrastructure businesses rely on to operate securely and efficiently.
From semiconductors and servers to networking equipment and storage arrays, many of the components that power modern IT environments are either made in China or contain Chinese-manufactured parts. The result is a growing concern among business leaders, IT departments, and procurement teams alike: What will these tariffs mean for technology budgets, supply chains, and long-term strategic planning?
Let’s break it down.
What the New Tariffs Include—and Why They Matter
In May 2024, the Office of the U.S. Trade Representative announced new and increased tariffs on a wide swath of Chinese goods. These include semiconductors, EV batteries, solar cells, critical minerals, and medical technologies (many of which integrate IT systems) (USTR Press Release, May 2024).
Most notably, tariffs on Chinese semiconductors are scheduled to increase from 25% to 50% by 2025 (Reuters, May 2024).
Real-World Impacts on IT Infrastructure
Hardware costs are climbing. With tariffs applied at the component or assembly level, many U.S. vendors are now facing higher import costs, particularly on servers, laptops, networking switches, and data center equipment. Those increased costs are being passed on to the customer. According to a Wall Street Journal report, even large retailers like Home Depot are adjusting sourcing strategies to manage supply chain pressures stemming from the trade shift.
Procurement timelines are getting squeezed. Businesses are scrambling to place orders ahead of tariff deadlines, causing a spike in shipping activity and a growing risk of delays. As of May 2025, ocean freight bookings from China to the U.S. surged by 30%, according to shipping analytics firm Vizion (Reuters, May 2025).
Vendor contracts are shifting. Major IT manufacturers are reconsidering their own sourcing strategies, and some may phase out product lines or support models that are no longer viable under the new tariff regime. For example, Cisco says it has already reduced its China exposure by 80% by shifting production to other countries.
Longer-Term Outlook: Strategic Risk or Opportunity?
While the short-term impact of these policies is largely negative for IT buyers—higher costs, supply delays, and procurement uncertainty—the longer-term picture is more complex.
On the positive side, some businesses may benefit from a push toward supply chain diversification, as manufacturers seek to move production from China to countries like Mexico, Vietnam, and India. Over time, this could lead to more resilient and geopolitically balanced sourcing—though building out those capabilities will take years.
The tariffs also align with broader efforts to reinvigorate domestic semiconductor manufacturing, with support from bipartisan legislation like the CHIPS and Science Act. If successful, this could reduce future dependence on foreign components and encourage a new wave of American tech innovation.
However, there are significant risks as well. Prolonged elevated costs could force organizations to delay necessary IT upgrades, extend equipment lifecycles beyond recommended limits, or reduce investments in emerging technologies like AI and IoT—especially among small-to-midsize firms. According to IDC and Canalys analysis and CIO Dive reporting, businesses are already trimming IT budgets and pushing off refresh cycles as uncertainty grows.
What Businesses Should Be Doing Right Now
If your organization is planning any infrastructure upgrades, hardware refreshes, or network expansions in the next 12–24 months, now is the time to act strategically:
- Audit your current hardware and lifecycle plans.
- Talk to your vendors and Managed Service Provider (MSP).
- Secure updated quotes.
- Plan for budget flexibility.
- Stay informed via the U.S. Trade Representative, and other trusted sources.
Final Thought: Planning Ahead Beats Playing Catch-Up
INCREASED VOLATILITY – As noted in recent Kiplinger analysis, inflation data hasn’t fully reflected the effect of these tariffs yet, largely because many companies are still burning through pre-tariff inventory. But pricing pressure is expected to build later in 2025 as restocking begins under higher rates.
If you see something like a large purchase on the horizon, we don’t see less uncertainty coming in this calendar year. It may all be a bluff… only time will tell.
As these new trade policies take effect, the organizations best prepared to manage them will be those that treat tariffs not as a temporary nuisance—but as a long-term variable in their IT strategy.
At Electronic Office, we help clients navigate this shifting terrain with vendor guidance, infrastructure planning, and sourcing strategies built for flexibility. If you’d like help assessing your risks—or just want a second set of eyes on your procurement timeline—we’re here to help.
