Trump Tariffs: Impact on Tech and Your Wallet in 2025

When you woke up this morning, you probably checked your smartphone, maybe fired up your laptop, or asked your smart speaker about the weather. What you might not have considered is how the price and availability of these everyday tech companions are about to change under US President Donald Trump’s expanded tariff policies.

Since returning to office in January 2025, Trump has wasted no time implementing his promised tariff strategy, doubling down on his first-term approach with even broader measures targeting imports from China and many other countries (including a few islands inhabited by penguins, not people). The tech industry—globally interconnected by nature—now finds itself at the centre of an economic reshuffling that will eventually make its way to your wallet.

Trump’s Tariffs 101: The Basics

Before diving into the specific impacts on tech, let’s clear up what we’re talking about when we say “tariffs.”

A tariff is essentially a tax imposed on imported goods. When a shipment of smartphones arrives at a U.S. port from China with a 25% tariff, the importer must pay the government 25% of the value of those phones before they can be sold domestically.

Tariffs serve multiple purposes:

1. They generate revenue for the government
2. They can protect domestic industries from foreign competition
3. They can be used as leverage in international trade negotiations
4. They can address perceived unfair trade practices

The U.S. has used tariffs throughout its history, but their prominence in economic policy has ebbed and flowed. In the early 20th century, tariffs were high and common. After World War II, the global economy moved toward more free trade with generally lower tariffs through agreements like GATT and later the WTO.

A decade ago, under the Obama administration, average U.S. tariff rates were around 1.6% across all products, among the lowest in American history. Even sensitive industries like electronics typically faced tariffs below 5%. This reflected the dominant economic philosophy that global supply chains and relatively free trade benefited American consumers and businesses.

The Trump administration’s first term marked a significant philosophical shift. According to the Tax Foundation, the 2018-2020 tariffs eventually covered approximately $460 billion of U.S. imports. These trade actions raised average tariff rates from 1.6% to roughly 3% at their peak, more than doubling the effective tax rate on imports. Now in 2025, we’re seeing another substantial increase, with experts estimating effective tariff rates reaching approximately 5.2% across all goods—the highest in modern American history.

For tech specifically, the landscape has transformed even more dramatically. The category that once enjoyed nearly tariff-free status (below 2% on average in 2015) now faces tariffs ranging from 20-35% on many components and finished goods. The Tax Foundation’s analysis indicates that the 2018-2020 tariffs alone reduced long-run GDP by 0.23% and eliminated nearly 180,000 jobs, suggesting the current expanded tariffs could have even more significant economic impacts.

The Policy Landscape: What’s Actually Happening

Trump’s administration has implemented several key tariff policies affecting technology:

1. Increased tariffs on Chinese electronics from 25% to 35% on components and finished goods
2. New 20% tariffs on previously exempt semiconductor components
3. Expanded tariffs to include tech imports from Vietnam and other Southeast Asian nations where companies had relocated to avoid previous China-focused tariffs
4. Special focus on batteries and rare earth minerals critical for everything from EVs to smartphones

According to the Peterson Institute for International Economics, these new tariffs cover approximately $400 billion in tech-related imports annually—substantially more than previous administrations’ trade measures.

“These tariffs represent the most significant trade action directed at technology supply chains in modern American history,” notes Dr Emily Chen, trade policy expert at the Brookings Institution. “Unlike previous rounds, these measures were designed specifically to reshape global tech manufacturing.”

The lessons from the 2018-2020 tariff implementation are informative. The Tax Foundation’s research reveals that approximately $72 billion in additional tax revenue was collected from the previous round of tariffs, but most economic analyses found this was largely paid by American businesses and consumers rather than foreign exporters. As the current administration expands these measures, similar cost-shifting dynamics are expected.

The iPhone Effect: A Case Study in Tariff Impact

To understand how these tariffs work in practice, let’s look at America’s most iconic tech product: the iPhone.

Despite Apple’s efforts to diversify its manufacturing base during Trump’s first term, significant portions of iPhone assembly and component sourcing still occur in China. The new 35% tariff on Chinese electronics creates a profound dilemma for Apple.

Let’s break down what happens with the iPhone 16 Pro :

Based on analyst estimates from Counterpoint Research, the components and assembly for an iPhone 16 Pro might cost Apple approximately $550. Under the new tariff structure, Apple would need to pay an additional $192.50 per device in tariffs for units manufactured in China—a massive increase that represents about 19% of the current $999 retail price.

“Apple faces three unappealing options,” explains tech industry analyst Ming-Chi Kuo in a recent research note. “They can absorb the tariff cost and accept lower margins, pass the costs to consumers through price increases, or accelerate their already complex supply chain diversification—likely some combination of all three.”

Early indicators suggest Apple is pursuing that mixed approach. In a March earnings call, Apple CFO Luca Maestri hinted at “pricing adjustments in select markets” while also noting “accelerated supply chain realignment initiatives” that would cost the company $4-5 billion in the short term.

For context, when the Trump administration imposed 15% tariffs on certain Chinese goods in 2019, Apple was largely able to avoid passing costs to consumers by optimising its supply chain and absorbing some costs. But the new 35% rate makes that strategy far more difficult.

The Wall Street Journal reported in February that Apple suppliers like Foxconn and Pegatron have accelerated plans to expand assembly operations in India and Vietnam, aiming to reduce Chinese manufacturing exposure by 40% by 2026. But such transitions take time, leaving Apple and consumers in a challenging position for the next several product cycles.

“What happens with the iPhone will be a bellwether for the entire consumer electronics industry,” notes Carolina Milanesi, consumer tech analyst at Creative Strategies. “If Apple raises prices substantially, it signals that even the most powerful tech company with the strongest margins can’t fully shield consumers from these tariff impacts.”

How Tech Companies Are Taking the Hit

For tech giants and startups alike, the tariffs create a complex calculus of costs, manufacturing decisions, and pricing strategies.

Apple, which had already begun diversifying its manufacturing beyond China during Trump’s first term, now faces difficult decisions about its remaining Chinese production. According to Bloomberg analysis, approximately 30% of Apple’s supply chain remains in China, and the company’s Q1 earnings call referenced “significant supply chain adjustments” in response to the new tariff environment.

For smaller companies without Apple’s resources, the picture is even more challenging.

“The nimble startups creating next-generation hardware now face a brutal maths problem,” explains Marcus Wong, founder of CircuitBase, a hardware accelerator. “Their manufacturing costs just jumped 20-35% overnight, and venture capital isn’t exactly flowing to cover those kinds of unexpected increases.”

The semiconductor industry faces particularly acute challenges. The Semiconductor Industry Association estimates that the new tariffs will increase production costs by 12-18% for companies using global supply chains—even as the CHIPS Act aims to strengthen domestic production.

Already, we’ve seen semiconductor stocks crash–we’re talking the NVIDIAs, AMDs, and TSMCs of the world reacting to Trump’s sweeping reciprocal tariffs announcement. The semiconductor industry now faces uncertainty as these tariffs threaten to disrupt global supply chain and raise costs for US companies relying on foreign chip manufacturing.

This matches the Tax Foundation’s findings that the earlier round of tariffs created substantial deadweight losses to the economy—meaning the economic harm exceeded the revenue raised. For tech firms, this manifests as operational disruptions that go beyond direct tariff costs.

Your Tech Budget: Prepare for Impact

So what does this mean for you and your tech purchases? The answer isn’t straightforward, but several patterns are emerging:

Smartphone prices are projected to increase by $75-200 for flagship models this year, according to Consumer Technology Association estimates. Mid-range models, often operating on thinner margins, may see proportionally higher increases.

PC and laptop manufacturers are adopting varied approaches. Dell announced it expects to raise prices by 8-12% on consumer models, while HP is pursuing what its CEO calls a “blended strategy” of partial price increases combined with component substitutions.

Smart home devices, which often operate on razor-thin hardware profits with business models centred on subscriptions or data, may see the most dramatic changes. Amazon has already increased Echo device prices by 15%, while Google remains committed to current Nest pricing “for now.”

The timing of these increases will vary by product category and inventory cycles. Retailers with existing stock imported before the tariffs took effect can temporarily buffer consumers, but industry analysts expect full price impacts to be visible by summer.

Adaptation: The Tech Industry’s Superpower

If there’s one thing the tech industry excels at, it’s adaptation.

Manufacturing shifts that began during the first round of Trump tariffs have accelerated dramatically. Taiwan-based Foxconn, which manufactures products for numerous American tech brands, announced in February the expansion of its planned manufacturing facilities in Wisconsin and new sites in Arizona—signals that reshoring is gaining momentum.

Supply chain analytics firm Resilinc reports that tech companies have initiated 43% more supply chain diversification projects in Q1 2025 than during all of 2024, with India, Mexico, and Malaysia seeing the greatest increases in new tech manufacturing initiatives.

Innovation in materials and design may ultimately produce unexpected benefits. “We’re seeing fascinating adaptations,” notes Dr Sarah Kim, materials scientist at MIT. “Companies are reimagining products with fewer components, more modular designs, and sometimes even better repairability as they optimise for these new economic realities.”

The Tax Foundation’s analysis suggests that these adaptation strategies come with costs themselves—estimated at approximately $68.8 billion in lost economic activity during the previous round. This highlights why consumers will inevitably bear some portion of these costs, even as companies work to mitigate them.

The Long View: Reshaping the Tech Landscape

Beyond immediate price increases and supply chain shuffling, the tariffs point toward a potential fundamental reshaping of the tech industry.

The most significant long-term impact may be a more regionalised approach to tech manufacturing and markets. The Boston Consulting Group projects that by 2027, North America will produce 38% more consumer electronics than it did in 2023—reversing decades of offshoring.

For consumers, this could eventually mean products designed specifically for regional markets rather than global ones. Your next smartphone might be more expensive initially but potentially designed with local preferences and regulations in mind.

American tech workers could see expanded opportunities as companies invest in domestic R&D and manufacturing. The Bureau of Labor Statistics projects 15% growth in domestic tech manufacturing jobs over the next three years—though many will require different skills than previous manufacturing eras.

“We’re not returning to the tech manufacturing environment of the 1980s,” explains economist Rachel Torres from the Economic Policy Institute. “We’re creating something new—more automated, more specialised, and potentially more resilient.”

Finding Balance in a Changing Tech Economy

As these economic forces play out across boardrooms and assembly lines worldwide, the impacts will eventually reach our homes and pockets.

In the short term, being a tech consumer means becoming a more strategic one. The predictable annual upgrade cycles we’ve grown accustomed to may no longer make financial sense if price increases outpace meaningful innovations. The secondhand and refurbished markets—already growing for sustainability reasons—could see additional boosts as consumers seek alternatives to higher prices.

For businesses, particularly small and medium enterprises, technology purchasing decisions now require more careful consideration of timing, necessity, and long-term value. The days of treating tech as an easily replaceable commodity may be waning.

What’s clear is that the intersection of trade policy and technology has never been more consequential for everyday consumers.

That smartphone you checked this morning tells a story not just of technological innovation, but of an industry and a consumer base adapting to a rapidly changing economic landscape. How we respond—as consumers, as businesses, and as a society—will determine whether these changes ultimately strengthen or weaken both our technological future and our economic resilience.

Sources included in this article are linked directly throughout the text, featuring research and analysis from the Peterson Institute for International Economics, Brookings Institution, Bloomberg, Semiconductor Industry Association, Consumer Technology Association, Bureau of Labor Statistics, Boston Consulting Group, Economic Policy Institute, Tax Foundation, Counterpoint Research, Wall Street Journal, Creative Strategies, and other organisations with reports published between January and March 2025.