The aftereffects of US tariffs on the tech market: What IT leaders must know

The resurgence of tariff wars has disrupted the global tech ecosystem. With the United States imposing significant tariffs of up to 25% on imports from Mexico and Canada, and an additional 10% on Chinese goods, the ripple effects are deeply impacting IT budgets, future costs, supply chains, cloud infrastructure digital transformation timelines.

For IT leaders, particularly those overseeing infrastructure and operations (I&O), cloud strategy, and end-user digital experiences, this evolving economic landscape requires immediate recalibration. Here's CXO Focus' take on how IT decision makers can navigate the tariff uncertainities.

1. IT infrastructure and operations should be rebuilt with resilience in focus

The new tariffs have disrupted the availability and pricing of core IT hardware components including servers, networking gear, semiconductors, and IoT devices. For example, the price of HPE ProLiant servers could increase by 12—20%, depending on the tariffs applied to the region where they are manufactured. Also, Intel and Micron have accelerated domestic chip manufacturing in Arizona and Idaho, but these efforts come with a high upfront cost. As reported by Matrix Integration, tech buyers are already reporting 15—20% hikes in infrastructure procurement costs.

For I&O leaders, the focus must now shift to:

• Vendor diversification: Build resilience by exploring non-tariff-impacted geographies or domestic U.S. suppliers.
• Life cycle extension strategies: Extend the lifespan of existing infrastructure, such as extending server refresh cycles by 12—18 months with preventive maintenance and firmware upgrades.
• Hybrid infrastructure: Rebalance between cloud and on-premises investments based on where cost efficiency can be maximized post-tariffs.

2. Cloud FinOps teams must consider shifting cost models and strategic sourcing

Cloud providers, especially hyperscalers with hardware dependencies, are already seeing tariff-induced cost surges, which are being passed on to customers. Microsoft and BlackRock’s new $10B investment in U.S.-based AI infrastructure aims to localize supply chains, but will also likely raise service costs for customers in the short term.

Multicloud strategies might now need to include:

• Cost-aware cloud architectures: Leverage serverless, container-based, and event-driven designs that optimize resource usage.
• Edge and regional cloud deployments: Reduce reliance on heavily impacted U.S. regions by shifting workloads to emerging global hubs.
• FinOps and transparency: Empower IT and finance teams with real-time visibility into cloud cost anomalies caused by tariff trickle-down effects. Companies like Adobe are doubling down on FinOps to track spend deviations caused by global disruptions.

3. Digital transformation strategies should factor in tariffs as a time-to-value risk

Tariffs have extended lead times on essential tech enablers, delaying enterprise modernization efforts. Apple’s shift to manufacture iPhones in India is a prime example of companies realigning transformation timelines due to geopolitical pressures.

Digital transformation leaders must:

• Reprioritize critical initiatives: Delay non-essential programs and accelerate those with immediate business ROI.
• Invest in low-code/no-code tools: Minimize dependency on complex backend infrastructure while still delivering business value. Retailers like Walmart are scaling internal low-code platforms to sustain innovation without ballooning infrastructure costs.
• Tighten integration governance: Avoid vendor lock-in for volatile trade environments by investing in open APIs and data portability.

4. The digital experience could become collateral damage. Prepare ahead.

From SaaS latency to hardware shortages for endpoint devices, the user experience is at risk. For instance, a recent Business Insider report highlights how Gen Z users are feeling the pinch as affordable tech becomes more expensive due to increased component costs.

IT operations teams must:

• Manage digital experience across regions: Proactively monitor digital experience metrics across regions impacted by tariff-influenced infrastructure disruptions.
• Strengthen endpoint analytics: Detect performance dips related to aging or substitute hardware.
• Deploy AIOps: Reduce manual overhead and maintain service continuity amidst budget squeezes. Financial firms and healthcare providers are increasingly relying on AIOps to maintain SLA compliance under hardware constraints.

5. Strategize your business approach for global retaliation and market fragmentation

The tariffs have prompted tariff retaliatory measures from Canada and China, and the European Union is considering hitting U.S. digital services. This opens the door to increased regulation, data localization mandates, and competitive disadvantages for U.S. platforms abroad.

IT leaders must:

• Conduct scenario planning: Evaluate impact and plan for service availability and compliance in affected regions.
• Engage policy and legal teams: Track retaliatory measures affecting SaaS, cloud, and data flows.
• Design geo-fenced services: Maintain performance and compliance across divergent regulatory zones.

IT leaders must realign their strategy for the long game

Tariffs are no longer just an economic lever, they are strategic disruptions in the IT landscape. Forward-thinking CIOs, CTOs, and IT operations leaders must respond not with panic, but with precision. This means reengineering sourcing strategies, driving efficiency into cloud and infrastructure investments, and placing digital experience at the center of resilience planning.

Want to stay ahead?Join CXO Focus as we explore more on how to realign you strategies to build resilient IT operations that meets your strategic business goals. It's time to make geopolitical risk management a permanent line item in your IT strategy!