Let’s talk specifically about the tech impact.
The International Data Corporation warns that the United States government’s recent tariffs could halve global information technology spending over the next six months. The organization predicts that these tariffs will raise technology prices, disrupt supply chains, and weaken overall spending in the sector. Originally forecasting a ten percent growth in global IT spending, the IDC now expects to revise this figure significantly downward to five percent due to the recent tariff announcements.
In The Wall Street Journal, it was highlighted that the dream of the Trump tariffs is to boost high-tech manufacturing in the United States, but the reality could lead to significantly higher prices for consumers. For instance, the cost of the iPhone 16 Pro with 256 gigabytes of storage is currently priced at one thousand one hundred dollars. The bill for materials for Apple is approximately five hundred fifty dollars, which rises to around five hundred eighty dollars when factoring in assembly and testing. However, with a newly announced tariff of fifty-four percent on goods from China, the total cost could escalate to around eight hundred fifty dollars. This shift would force Apple to increase prices to maintain profit margins, emphasizing the complex global supply chain that defines its flagship product.
“Blood in the Machine” discusses the implications of AI-generated tariffs introduced by the Trump administration, which have sent the stock market plummeting. Analysts noted that the administration did not calculate these tariffs correctly, instead possibly using a formula suggested by AI chatbots that divided the U.S. trade deficit by a country’s exports. The newsletter warns of a disconnect between the hype surrounding artificial intelligence and its real-world applications, emphasizing that the true danger lies in thoughtless decision-making by those in power using AI tools.
CRN did a “talk to people” piece, , where solution provider executives expressed concerns over the impact of President Trump’s evolving tariff regime, which they describe as creating confusion, uncertainty, and pain in the industry. Following the announcement of additional tariffs on imports from China, many companies, including Maingear, faced increased costs, with laptops expected to rise by around seventy dollars per unit due to shipping and labor expenses. Executives predict price increases of ten to fifteen percent on hardware and anticipate a decline in customer IT budgets as businesses grapple with financial pressures. Despite these challenges, they acknowledge the necessity for ongoing IT investments, particularly in security and technology refreshes.
Why do we care?
I laughed at an AI analysis that offered “As the uncertainty continues, companies are urged to advise clients on managing their IT spending effectively.” No shit, sherlock. It’s the uncertainty that’s the concern.
With tariffs potentially doubling the cost of key components, end-user device prices are set to rise significantly. CRN reports that laptops could see a $70 increase per unit, alongside a 10-15% rise in other hardware costs. Clients already struggling with tight budgets may delay refresh cycles or look for refurbished options, which MSPs can proactively source and recommend.
I want to note something — Advising clients on long-term strategies to diversify their tech stack and reduce reliance on heavily tariffed imports could prove valuable. And that’s very un-MSP, who like to standardize everything. It’s very hard to standardize when prices are varied.
And, as tech prices rise and companies face financial pressure, IT budgets may shrink, especially for non-essential projects. MSPs might see a shift from proactive upgrades to reactive maintenance, which will require recalibrating service portfolios to include more flexible, on-demand support… again, very un MSP.
