Updated with possible Taiwan tariffs
President Trump has set less than a week --Saturday, Feb. 1-- for when he could impose tariffs of 25% on goods from Mexico and Canada and possibly 10% on goods from China. Other countries, like Taiwan, could be in the mix.
Press Secretary Karoline Leavitt in her first press conference confirmed on Tuesday that "the president is committed to effectively implementing tariffs just like he did in his first term." She said the Feb. 1 date holds for tariffs for Mexico and Canada and potentially China.
But mention of the date itself could have been a Trump-style warning to companies and government leaders, broadly, to quickly revamp the way they source and pay for components for a massively complex supply chain.
And, the Trump warnings could be intended to remind foreign companies and governments that Trump is in charge and the US deserves respect, especially over matters of immigration to the US.
On Sunday, Colombia agreed to accept military flights from the US carrying deportees only after the White House threatened 25% tariffs on all goods and other penalties. The White House issued a statement declaring victory: “Today’s events make clear to the world that America is respected again.”
On Monday, the president spoke to a gathering of House Republicans in Florida suggesting that Taiwan could be subject to as much as a 100% tariff on semiconductors, prompting a response from Taiwan's economy ministry calling the US chip design and Taiwan foundry model "a win-win business model" for industries in both countries. Taiwan is the home of TSMC, which manufactures advanced chip nodes for Nvidia, Apple and many others. TSMC is also building a major chip fab in Arizona, relying partly on $6 billion in CHIPS Act funds.
Electronics suppliers prepping for tariffs for months
While tariffs have been at the heart of various Trump administration negotiations, the impact of tariffs for electronics companies, both in the US and abroad, would be profound. Electronics companies have been preparing for months for the worst-case scenario of Trump-style tariffs, partly because the electronics supply chain is far more complex than for other products like grain or metals, according to supply chain experts. For example, a modern automobile has upwards of 5,000 parts sourced from hundreds of different suppliers based in dozens of nations.
But the Trump administration’s biggest objective may be far more simple than what has forced investors to price in the higher cost of goods due to tariffs.
President Trump said as much himself at the World Economic Forum on Feb. 23 in a livestream that the alternative to tariffs will be for foreign companies to make products in the US, taking advantage of a possible 16% corporate income tax rate, down from the current 21%. “My message to every business in the world is very simple: Come make your product in America, and we will give you among the lowest taxes of any nation on earth,” Trump said. “But if you don’t make your product in America, which is your prerogative, then very simply you will have to pay a tariff. Differing amounts, but a tariff.”
In similar manner, President Trump has also implied the proposed tariffs on Mexico and Canada are intended to help stop an influx of illegal immigration and fentanyl, or at least to open up negotiations for how that stoppage can begin to happen. Add Columbia to that list over immigration.
CTA forecasts price increases on electronics
Even if all of the president’s rhetoric is primarily meant to set the stage for negotiations with foreign governments, electronics companies are clearly planning for the tariff impact. The Consumer Technology Association, producers of the massive CES2025 event, in January reiterated an October finding that Trump-backed tariffs could lead to a $90 billion annual decline in spending power by Americans toward laptops, smartphones and many other products. An average laptop price would increase by $357, while an average smartphone would increase by $213, CTA said.
RELATED: CTA briefly condemns Trump tariff idea s CES 2025 opens
Other electronics trade organizations, if not individual companies per se, have projected that proposed Trump administration tariffs would cause widespread disruption to the global supply chain, increase costs and potentially quicken efforts to diversify sourcing away from China.
Supplyframe's analysis of tariff impact
Supplyframe, a unit of global electronics powerhouse Siemens, shared with Fierce Electronics an analysis of potential tariff impacts. These impacts include an analysis of US International Trade Commission reporting showing China provided almost one-fourth of all electronics imports in the US for all of 2023, for a total of nearly $146 billion.
A 10% tariff would boost the amount paid by US shippers to nearly $170 billion, more than a $23 billion increase based on the 2023 results, Supplyframe said. (Supplyframe’s Commodity IQ analysis said the total customs value of imports in 2023 from China in 2023 was $120 billion across goods covered under what is known as the Harmonized Traffic Schedule for electronic products.)
A China electronics tariff hike would affect a wide range of electronics from semiconductors to chip packaging to printed circuit boards, Supplyframe said. Taking PCBs alone, China made up more than half (54%) of global production in 2023, compared to just 4% for the US. With PCBs used in every electronic device with a plug, a 10% increase in costs “would have a massive impact on the pricing of all finished products,” Supplyframe told Fierce.
Mexico provided 40% of the $215 billion total customs value for electronics in 2023, which would include about $85 billion subject to 25% tariffs that Trump has suggested. Canada’s total customs value of $10 billion for electronics would also be subject to a 25% tariff.
Supplyframe also has followed the recent introduction of the Restoring Trade Fairness Act, which calls for a 35% minimum tariff on all Chinese goods and a 100% minimum tariffs on articles such as unpopulated PCBs, and PCB assemblies for diodes, LEDs, transistors, transducers, amplifier ICs, memory ICs, microcontrollers and microprocessors and more.
Aside from price increases to US companies importing electronics goods, Supplyframe sees disruption to the supply chain. Electronics manufacturing services companies that have moved production operations out of China to Mexico in recent years, including Jabil and Flex will be hit, said Richard Barnett, chief marketing officer at Supplyframe. “All of those investments are now potentially at risk,” he said.
A “powerful double down dynamic” expected with electronics sourcing
He also predicted a “powerful double-down dynamic” on pricing from parts shipped from China to the US that are then sent to Mexico and Canada for partial or full assembly and then shipped back to the US for sale.
“There are no safe harbors in this new tariff regime,” Barnett said in an interview.
More broadly, Barnett said companies that Supplyframe represents are worried about a lack of clarity in the Trump administration’s objectives with tariffs, which have included as a motivator the moving of manufacturing operations of electronics and other products to the US or as a starting point for negotiations over broad foreign policy objectives around immigration.
Case in point: President Trump’s threatened Colombia with a 25% tariff on all goods and other sanctions when the country refused the landing of two US military planes carrying migrants being deported from the US. On Sunday, Columbia capitulated and allowed the planes to land.
Flawed thinking over Trump tariff objectives
Supplyframe is just one organization voicing the questions by electronics businesses over President Trump’s planned policy end game with various tariff proposals.
Referring to the Trump team, Barnett said, “They don’t have a clear policy mandate or goal that governs the scope and timing…with overlapping goals and objectives they’ve announced,” he said. “How effective with the tariffs be? It’s hard to answer, especially in terms of [being used as] a general source of revenue to reduce debt” or inflation. “I just generally think there’s some flawed thinking.”