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Dodging bullets in a tariff-triggered tech war

April 2025

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Voice and Data

US tariff exemptions on electronics offer relief, but supply chain shifts to India and Vietnam show how geopolitics keeps reshaping global tech trade.

- BY SHRIKANTH G

Dodging bullets in a tariff-triggered tech war

The ongoing trade tussle between the US and the rest of the world increasingly looks like a war between the US and China, though other countries are equally impacted. However, with major tech manufacturers like Apple offshoring their production to China, the country has found itself in the driver's seat.

“In the days since Trump's tariff announcement, Apple lost over USD 640 billion in market value,” CNBC reported. The cost of an iPhone under Trump's tariff plan could have ballooned to as high as USD 3,500 under some estimates, according to the report.

The impact of Trump's tariffs was felt far and wide, with questions raised about whether they were truly necessary. Former US President Biden handed the US economy to Trump in good shape—if not thriving, at least steady—with lower unemployment rates. But increasingly, Trump's trade war and the ensuing tariffs may end up hurting the US more than any other country. For instance, the U.S. offshores almost everything—even American flags are ‘Made in China’.

TARIFFS CHALLENGE THE OFFSHORE MANUFACTURING MODEL

US manufacturers have thrived on labour arbitrage, and Trump's move seems more jingoistic than practical.

The short-term impact is more painful than the long-term benefits, and the course correction domestic manufacturers need to make—from offshore to onsite—cannot be achieved in weeks. It is a long haul, requiring both strategy and investment.

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