Shane Snider, Senior Writer, InformationWeekMarch 4, 20254 Min ReadFeodora Chiosea via Alamy StockThe Trump administration on Tuesday pulled the trigger on promised tariffs targeting goods and services from China, Mexico, and Canada, escalating new conflicts with Americas top three trade partners.Goods and services from Mexico and Canada will face tariffs of 25%, while Chinese goods will face an additional 10% (on top of the 10% announced a month ago). Those tariffs will be paid by importers, who will likely pass price increases onto consumers. Those countries have all announced retaliatory tariffs on American goods and services and other actions.Trump said the tariffs were enacted to stop the flow of fentanyl and chemicals used in the drugs production from entering the US. He has also stated the tariffs will spur domestic manufacturing.China announced immediate retaliatory tariffs of 10% to 15% on select US imports and new export restrictions for designated US entities. The country also said it filed complaints about the new tariffs with the World Trade Organization.Canada struck back with a 25% tariff on $20.7 billion worth of US imports, promising to add another $83.7 billion worth of goods and services in 21 days. Mexico was expected to announce its response on Tuesday.Gary Shapiro, CEO and vice chair of the Consumer Technology Association (CTA), says the tariffs will spur increased technology pricing across the board. Tariffs will spur inflation, and not just on groceries, Shapiro said in a statement. CTA research shows tariffs make the tech products Americans love and rely on more expensive.Related:IT leaders will feel the pinch as well. Budgets, already stretched thin to accommodate increased spending on artificial intelligence, will now face pricing pressure for components and materials mostly produced abroad.Jason Miller, a professor of supply chain management at Michigan State University, tells InformationWeek that even enacted for a short period, the tariffs will have long-lasting consequences. I think well have to start seeing negative consequences to the point that the decision is made to end the current tariff regime, he says in a phone interview. The challenge with that is that the President will have to have the optics that hes coming out a winner, so its difficult to see how that gets resolved soon. [Trump] seems to have a chronic inability to ever admit to having made a mistake.Tariffs on MaterialsThe Trump Administrations announcement of a blanket 25% tariff on aluminum and steel imports would also increase costs for the technology sector through direct and indirect economic pressure, experts warn.Related:Amid a flurry of President Donald Trumps executive actions in the first weeks of holding office, the administration has also announced a plan to charge a 25% tariff on aluminum and steel imports.Trump says steel and aluminum tariffs will encourage US companies to produce more domestically. But industries, including the tech sector, are dependent on steel and aluminum for building and machinery. The tech sector uses steel and aluminum for server racks, data center infrastructure, electronic components housing, and more.Miller said its not yet clear now the aluminum and steel tariffs will be applied along with the tariffs on all Canadian, Mexican, and Chinese goods. Will it be on top of those tariffs? Theres no clarity there yet, he says.How IT Leaders Should RespondAn IBM report spending outside of traditional IT operations could surge 52% this year as enterprise ramps up AI-driven transformation. Those costs could increase substantially as new tariffs are factored in.MSUs Miller says companies that were on the fence about capital outlays should act now. If youre on the fence about bringing something in now, versus a couple of months, I would get it now, he says, adding Trump may respond to retaliation efforts with even more tariffs. I wouldnt be surprised if were not looking at 40%-50% before all is said and done at the rate were going.Related:Whatever the case, the cost of the tariff action will likely be felt for years, Miller says. There will be lasting impact from this, he says. So, you need to have those conversations with customers, and say, Hey, weve got to pass some percentage of this cost increase on because we have to stay profitable. Its about being transparent about what tariffs are doing to cost structures.Read more about:RegulationSupply ChainAbout the AuthorShane SniderSenior Writer, InformationWeekShane Snider is a veteran journalist with more than 20 years of industry experience. He started his career as a general assignment reporter and has covered government, business, education, technology and much more. He was a reporter for the Triangle Business Journal, Raleigh News and Observer and most recently a tech reporter for CRN. He was also a top wedding photographer for many years, traveling across the country and around the world. He lives in Raleigh with his wife and two children.See more from Shane SniderWebinarsMore WebinarsReportsMore ReportsNever Miss a Beat: Get a snapshot of the issues affecting the IT industry straight to your inbox.SIGN-UPYou May Also Like