The IT hardware sector is experiencing unprecedented disruption due to recent tariff implementations. Affecting major manufacturers like Apple, Dell, HP, Cisco, and other key players, these tariffs are creating significant price increases, supply chain challenges, and forcing strategic adjustments across the industry. Firstbase's customers and others need to prepare for hardware cost increases ranging from 8-20% depending on product categories, with potential further escalation as additional tariffs are implemented and global trade tensions rise. The most viable strategies include accelerating planned purchases, exploring alternative procurement models, and developing contingency plans for extended deployment timelines.

Read our view on how to navigate the price hikes, policy shocks, and possible global procurement hazards .

Recent Tariff Developments and Timeline

The April 2025 "Reciprocal Tariffs"

On April 2, 2025, the United States announced significant new tariffs targeting approximately 60 countries and regions, with rates ranging from 25% to 104%. These tariffs, set to go into effect on April 9, 2025, are having an immediate impact on the IT hardware industry, particularly affecting devices imported from major manufacturing hubs. Asian manufacturing centers are particularly impacted with Vietnam facing 46% tariffs, Taiwan 32%, and Thailand 36%.

Yahoo Finance noted that China said it will raise its tariff on US goods to 84%, retaliating to the hefty new tariffs on its imports that kicked in on Wednesday.

The move came after the Trump administration followed through on a threat to add a 50% tariff on Chinese goods, in addition to 34% reciprocal tariffs, raising the overall tariff rate on Chinese goods to 104%. The steep new duties on China and 184 other US trading partners took effect at 12:01 a.m. ET on Wednesday.

Most concerning for hardware procurement is the warning of an additional 50% tariff specifically on Chinese goods, which would bring the total import taxes to an unprecedented 104% for products manufactured in China. This significantly exceeds previous tariff levels and marks a dramatic escalation in trade tensions that directly impacts IT hardware availability and pricing.

Earlier 2025 Tariff Actions

Before the April announcements, the year had already seen significant tariff activity affecting the technology sector. A 25% tariff on imports from Canada and Mexico went into effect on February 1, 2025, impacting companies with manufacturing operations in these neighboring countries. Throughout early 2025, various tariff adjustments specifically targeted consumer electronics, server hardware, networking equipment, and wireless infrastructure.

Price Impact Analysis by Hardware Category

Enterprise Networking and Server Infrastructure

The tariff impact is creating substantial price increases across enterprise hardware categories:

• Cisco 9000 Series routers are experiencing price increases of 10-15%, making large-scale network upgrades significantly more expensive.
• Aruba wireless access points and controllers face price increases of 8-12%, affecting businesses looking to scale their wireless networks.
• HPE ProLiant servers show price hikes of 12-20%, depending on manufacturing region and tariff levels.
• HPE has already increased server prices by approximately 8% in direct response to the higher tariffs imposed in 2025.
• Cisco reported that increased manufacturing costs combined with tariffs will likely raise Cisco Catalyst Switches prices by 5-10% by mid-2025.

Consumer and Business Computing Devices

The personal computing segment is experiencing similar disruption:

• PC manufacturers expect price increases of at least 15-20% due to the new tariff structure.
• Morgan Stanley Research indicates that for Dell and HP, "the added tariff cost could equate to nearly the entirety of their expected net incomes in 2025".
• Apple could face an additional cost burden of approximately $33 billion annually, representing 26% of its earnings before interest and taxes.
• Smaller boutique vendors and system integrators based in the US may experience the most significant impact as they assemble domestically but rely almost exclusively on Asian-sourced components.

“We’re in uncharted territories. If prices go up, which they probably will if these tariff prices actually hold then PC companies will start raising prices and Apple will be the last. Customers who act now can lock in costs and avoid the pain. If you can buy now. Buy now.”
— Ahmad Zakaria, COO Firstbase

Even Apple is flying planes of iPhones to the US from the uncertainty.

Supply Chain Disruptions and Manufacturing Shifts

Previous Adaptation Strategies Now Ineffective

Since 2018, many hardware manufacturers had been strategically diversifying their manufacturing bases away from China to mitigate earlier tariff impacts. For example:

• Apple relocated approximately 15% of iPhone production to India and moved all MacBook production for the US market to Vietnam.
• Dell diversified its US-bound notebook production to Vietnam.
• HP shifted production to Thailand.

However, the April 2025 tariffs have effectively nullified these strategies by targeting nearly all major manufacturing hubs. As Morgan Stanley Research notes: "there becomes very little differentiation in friend shoring vs. manufacturing in China—if the product is not made in the U.S., it will be subject to a hefty import tariff".

“We’re seeing companies pause production, halt exports, and reassess global distribution in real time.”
— Eldad Balas, Firstbase

Component Shortages and Manufacturing Disruptions

The rapid shifts in manufacturing locations are creating additional supply challenges beyond just price increases:

• GPU suppliers halting Chinese production lines to relocate to Taiwan or Vietnam have caused additional component shortages.
• With new tariffs now affecting these alternative manufacturing locations, there are fewer viable options for relocation, potentially worsening shortages.
• Some manufacturers are pausing production entirely while evaluating options, creating scarcity and market uncertainty.

Strategic Recommendations

Immediate Procurement Strategies

Given the imminent implementation of tariffs and projected price increases, you should consider these short-term strategies:

1. Evaluate Inventory Levels: Consider maintaining higher inventory levels of critical hardware components to buffer against both price increases and potential supply disruptions.
2. Review Contract Terms: For those with existing procurement contracts, review terms to understand how price increases will be handled and whether there are protections against tariff-related increases. With Firstbase we currently do not exploit this for our customers.

Medium-Term Strategic Adjustments

As the tariff situation evolves over the coming months, these medium-term strategies can help mitigate impacts:

1. Buy refurbished: there are a lot of devices on the market that have seen little use and have a ton more life in them. We can help procure nearly brand new devices at lower cost.
2. Extended Refresh Cycles: Consider extending the lifecycle of existing hardware where feasible, potentially delaying replacements until the tariff situation stabilizes.
3. Cloud Migration Acceleration: For workloads that can be migrated to cloud platforms, the increased hardware costs might justify accelerating cloud adoption strategies.
4. Budget Adjustments: IT procurement budgets likely need revision upward by 10-20% to accommodate the same level of hardware acquisition planned before tariffs.

Reach out to our Hardware Intelligence Advisors today to help!

Industry Outlook and Economic Impact

Global IT Spending Projections

The tariff situation is already affecting global IT spending forecasts. IDC previously projected 10% growth in global IT spending but is now revising expectations downward:

• Growth projections may decrease to around 5% due to tariff impacts and economic uncertainties.
• The direct inflationary effect on technology prices will be significant in the US market.
• Growing concerns about a broader economic slowdown may lead to weaker investment by businesses worldwide.
• The potential for a broadening global trade war with retaliatory measures could further impact the technology sector.

Industry Response and Future Scenarios

The IT hardware industry faces limited options in responding to these tariffs:

• Morgan Stanley Research has characterized the situation as "lose-lose" for hardware companies, with "raising prices" being their "most viable path forward".
• Major manufacturers indicate it's "unlikely" they will shift production to the US despite the tariffs.
• Component manufacturing for items like memory and processors remains concentrated in specific global regions, making complete supply chain reshoring impractical in the near term.

What’s next?

Firstbase’s Hardware Intelligence Advisors are on the forefront of this wave. The 2025 tariff landscape presents significant challenges for organizations relying on IT hardware procurement. As prices rise and supply chains adjust, Firstbase has an opportunity to provide immense value by offering strategic guidance, procurement expertise, and alternative acquisition models that help customers navigate this complex environment.

By staying ahead of tariff developments, maintaining close relationships with major vendors, and developing innovative procurement solutions, Firstbase can help customers minimize disruption while maintaining access to critical technology infrastructure despite the challenging tariff environment. Consider hosting regular briefings for customers on tariff developments, creating procurement strategy guides tailored to different customer segments, and developing models that show the financial impact of various procurement strategies under current tariff conditions.

The coming months will likely bring additional policy changes, manufacturer adjustments, and market shifts that require ongoing attention and strategic response. By positioning as the expert guide through this complex landscape, Firstbase can solidify its role as an essential strategic partner for IT hardware procurement in the age of tariffs. Reach out today!

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