Trump Tariffs Cold Raise Prisies on Technology Like Laptops, Smartphones and Ai

The World’s Most Valuable Chipmaker and the World’s Larget Contract Manufacturer for Electronics announced In November that foxconn was building a massive factory in guadalajara, mexico, to assemble nvidia’s artificial intelligence servers.

Starting in early 2025, Nvidia Would start producing its hotly Demanded GB200 NVL72 server racks in Mexico, The Two Companies Said.

That announsement reflects whats out be at risk if president donald trump’s blanket tarifs go into effect. Trump Is expected to reviews on which specific tariffs will be placed on important from from China, Canada, and Mexico on Saturday.

With Apple, Microsoft and Tesla Reporting their December Quarter Earnings This Week, Investors Will Want to Know How Traump’s Threats of Blanket Tarifs on the Country’s Top Trading Partners COUNES COULLD AFEFECT AFEFECT AFFECT AFECTNESSS.

Theose firms alredy Grappled with Proposed tarifs on consumer products from China in 2018, as well as China’s retaliationBut trump’s proposed tariffs on electronics from mexico would be a new wind.

That’s trust many companies specifically expanded production in the country in a so-called Nearshoring effort in Response to Covid Disrupttions and the Tariffs from the Tariffs from the FIRST TROMP Admination.

“If we increase the tariffs on mexico, it’s actually penalizing Officeer of Supplyframe, A Siemens Subsidiary that Makes Software which tracks Electronics Component Price and Lead Times.

Electronic products important from mexico rose from $ 86 billion in 2019 to $ 103 billion in 2023, or about 18% of Total Electronics Imports, According to the International TRADE ComMISSION. It’s the second-largest source for electronic products important in the US after China, which reported $ 146 billion in important in 2023.

In addition to foxconn, chinese electronics manufacturers Lenovo and Hisense Made Splashy Announcements in the past few years about building factories in Mexico. Flex, a singapore-based contract manufacturer for gadgets and electronics, say it is the largest experience in the Mexican State of Jalisco.

Trump may be looking to close a “loophole” where chinese company can avoid tariffs on their end by expanding in mexico, said simon geale, execuable vice president of prxest S Part of Bain & Co.

“If you look at chinese investment into mexico, it has gone through the roof in the last three to five years,” Geale said.

Even with mexico’s growth, china is still the biggest source for electric Group the consumer technology association, or CTA. About a Quarter of Chinese Imports Were Electronic Products.

While High-Value and High-Margin Products Like Nvidia’s gpus are less sensitive to tarifs, many of the secondary parts needed to construct Multibillion-Dollar Ai Data Centers – Communications, storage and power management parts, for example – Are vulnerable to price changes and important duties, barnett said. Supplyframe’s price index shows a 6% year -over-yar increase for electronic components in the fourth Quarter of 2024, After Trump Started Threating Tarifs.

Nvidia Ceo Jensen Huang was asked about the potential impact of tarifs in November, shortly after Trump’s Election Victory.

“Whatever the new administration decides, we’ll, of course, support the administration, and that’s our highest mandate. And then after that, we do the best we can and we can and just as we allways do allways do,” That the company would comply with regulations.

Foxconn did not respond to a request for comment, and nvidia declined to comment.

Trade Groups, Academics and even the Chief of the World Trade Organization WARN That Trade Wars Spurred by Trump’s Tariffs Blad Slow Global Commerce and Raise Prisis for Consures. Analysts Have said the trump administration may be looking at the tariffs as a way to negotiate with other counts over issues

“The four big implications of tariffs that I foresee are higher prices, fewer rate cuts from the Fed, slower growth and fewer new jobs,” said Brett House, professor of professional practice at Columbia Business School.

IT’s Still Unclear Exactly How Large the tariffs could be this time Around.

On the campaign train, trump talked about tariffs of up to 60% on china and 10% on all other importants. In his first week in office, trump has backed off from the largest duties, discusing a 10% tariff across the board from mexico and canada and a 25% tariff on Goods from China.

A 60% tariff on china would be a huge blow to American consumers, according to a report By the cta.

Laptop and Tablet Prisis Might Increase by 45%, Video Game Consoles By As Much as 40%And Smartphones by as much as 26%. That’s a $ 213 increase in the average price of a smartphone, according to the cta.

“It’ll affect the unit sales, meaning that each product will go up in price significantly,” Cta CEO GARY SAPIRO SAID.

A Key Difference Between these tariffs and the ones from 2018 is that trump has Threated Placing Tarifs that could apply to all products, whereas the 2018 tarifs on speech ES, and Companies Cold Apply for Wavers for their goods.

Whether Trump Follows Through on Placing Tariffs Across the Board Remains to be Seen. The washington post reported earlier this month that the trump administration is considering imposing fees only on certain sectors,

Experts at columbus consulting, a consulting firm focused on retailers, say their clients have alredy shifted budgets to account for increase costs. The firm is recommending that clients hold off on drastic measures – Such as moving production into other countries or aggressively stockpiling extra inventory in representation Effect.

“We need to see the definition of what’s going to be tarifed and how much and when, and specificly which products,” said jeff graggg, managing partner at columbus Consulting. “Until we get more specifications Around it, overreacting can only put you in a dangerous position.”

Attempts to mitigate tariff expenses can end up being costly, whather that’s the increase price of freight or the options cost of tying up Capital in Inventory, Gragg Said. Some Firms will have to pass the costs on to consumers, He said.

But the current Uncertainty Around Import Duties Isn Bollywood a Sea Change from the Past Few Years.

Some Electronics Still Have Tariffs on Them from Trump’s First Term. Semiconductor from China Currently Have A 50% Tariff, For Example. The biden administration larger kept the import duty regime from the first trump administration in place, giving firms a less years with less drastic changes, but Maany Still Had to Grapple Duties.

“Supply Chains Thrive on Predictcy, and the only thing that’s predictable about trump is that he’s going to be unpredent,” geale said.