Hardware

How Tariffs Might Impact Government’s Technology Purchases

The prices of laptops and monitors, in particular, are expected to increase.

Dave Nyczepir is a Senior Editor for Manifest.

Tech companies are monitoring the impact of President Donald Trump’s tariffs on their supply chains so they can readily communicate any resulting price increases and delays in order fulfillments to customers, and that includes the government.

The tariffs are certain to increase the costs of devices that agencies routinely purchase, including laptops and notebooks, which are mostly manufactured in China, but their effects on the customs process will take longer to assess.

Trump doubled his existing tariffs on Chinese products to 20% last Tuesday, and China retaliated with tariffs as high as 15% on various U.S. goods. That same day, Trump imposed 25% tariffs on imports from Canada and Mexico — limiting the tax on Canadian energy to 10% — but last Thursday he paused most of those for one month after Canada threatened retaliation and U.S. stock markets plunged. Trump floated even more tariffs as high as 250% on certain Canadian goods Friday, in what has become a volatile dance with no end in sight.

“I think client devices will be heavily impacted,” says Beau Perna, senior director of supply chain strategy at CDW. “Laptops, monitors — those are probably two of the biggest product lines that we are paying close attention to at CDW.”

Less concerning are price hikes to desktops, storage solutions and mobile devices because of where those are manufactured and the fact some original equipment manufacturers are leaving China.

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Assessing Tariffs’ Effect on the Customs Process

CDW’s supply chain team is working to understand the percentage of the products that it purchases that are ultimately manufactured in China. After that, the team will learn whether CDW is buying the product directly from the OEM or from a distributor.

Tariffs could slow down the customs process, impacting how CDW procures overseas products from OEMs and distributors. Any delays or cost increases will be felt by partners and customers as well, and CDW wants to communicate those as quickly as possible, Perna says.

One scenario of concern would be that OEM opts to move its operations to Taiwan, and then Trump sets an across-the-board tariff on all imports.

“The real answer is move to the U.S., which is what Trump is trying to do,” says Conner Austin, director of supply chain strategy, risk and compliance at CDW. “That’s just a little easier said than done.”

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Tariffs Aren’t Likely To Increase Supply Chain Security Challenges

Tariffs won’t necessarily exacerbate tech companies’ supply chain security challenges, such as tracking the country of origin for individual components within devices. That’s because the government already prohibits the inclusion of certain Chinese technologies within its supply chain, and companies are used to working with sellers to avoid violating those regulations, Perna says.

“We’ve got a decent grasp on where our products are manufactured, but there's still a gap in data,” Perna says. “For us it’s about how do we continue to close that gap to understand country of origin for as much of our catalog as possible?”

Many OEMs and distributors don’t track country of origin at a machine or serial level to know where every component in a laptop came from, and only report where it was manufactured, Austin says.

Until an industrywide governance body establishes a risk mitigation framework, CDW has International Organization for Standardization (ISO) 27001 and 2000 certifications verifying its information security and quality management, respectively.

“I think there just needs to be some maturity in the industry around component versus SKU-level capturing and what's going to be the standard there,” Austin says.

UP NEXT: Follow StarTech.com’s guide for your agency’s next laptop upgrade.

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