Impact of Trump Tariffs on Global Trade and Tech Industry

The Trump administration has announced a sweeping 10% tariff on most key trading partners, effective April 9, 2025. Automotive imports face an even steeper hit of 25% on passenger vehicles, with auto parts following suit in a month.

If the tariffs are implemented, what’s certain is that they will hit consumer wallets, according to Counterpoint Research analysis. Higher import duties will raise prices across key sectors, from consumer electronics to autos. Companies will pass on costs to US buyers, squeezing household budgets and cooling demand. The obvious risk is a slowdown in consumption that could rip through the tech industry. “It’s tough to go against the math. Higher prices equal lower demand. It’s economics 101 and I don’t think this ends well for anyone,” said Yang Wang, Senior Analyst at Counterpoint Research.

The US doesn’t manufacture smartphones. Asia, led by China, South Korea, Taiwan, India, and Vietnam, dominates the supply chain and manufacturing. Apple, Samsung, Google, and other players rely on complex, deeply integrated networks all outside of the US. Moving manufacturing stateside isn’t happening overnight (or ever) without massive government subsidies and round-the-clock availability of skilled labor, and even then, prices will soar because of a lack of cost arbitrage. American consumers will feel the immediate impact of the newly tariffed smartphone prices in an already inflationary climate. “I guess the logic is ‘make it too expensive for smartphone OEMs to produce overseas, and they’ll eventually shift to the US.’ But that will never happen without massive subsidies and cheaper and skilled labor. There is zero cost advantage in manufacturing in the US,” said Neil Shah, VP of Research at Counterpoint Research.

Semiconductors may have dodged direct tariffs, but the sector will be directly impacted by the turbulence. Chipmakers like Intel, AMD, and Qualcomm rely on global supply chains, and any disruption in tech manufacturing will trickle down. Supply chain diversification is coming, with India positioning itself as a potential hub. But building fabs isn’t an overnight play, it’s a multi-year, multi-billion-dollar gamble with no guarantees. “Semiconductors are directly upstream to smartphones. The sector is second in line to feel the impact, which could be a quarter away depending on where inventories are sitting now,” said Peter Richardson, VP of Research at Counterpoint Research.

With a 25% tariff on passenger vehicle imports and upcoming duties on parts, prices for new cars could jump by $8,000–$15,000. Higher costs will squeeze consumers, push buyers toward used cars, and drive up repair expenses. European, Japanese, and South Korean automakers, which count the US as a key market, are caught in the crossfire. Ironically, instead of creating jobs, tariffs could cost them as manufacturers adjust to lower demand and squeezed margins. “The new car market is looking very bearish right now as prices will rise and supply will tighten. But it will be a good time to be selling used cars,” said Murtuza Ali, Senior analyst at Counterpoint Research.

India stands at an inflection point. While the short-term impact of US tariffs on India's electronics and semiconductor industries will be minimal, long-term shifts in global trade could create opportunities. India has been aggressively pushing for semiconductor self-sufficiency, and tariffs on China and other Asian players could accelerate investment in Indian chip design, OSAT, and eventual fab construction. Companies like NVIDIA, Intel, AMD, and Qualcomm are already increasing their R&D and validation operations in India, and further diversification could solidify India’s role in the global supply chain.

However, scaling up semiconductor manufacturing is easier said than done. The industry requires massive capital investment, advanced technology transfers, and a highly skilled workforce. If India can overcome these challenges, it could position itself as an alternative hub for chip assembly and manufacturing, potentially gaining from the supply chain realignment triggered by US tariffs.

On the downside, India’s electronics manufacturers could face higher costs if semiconductor tariffs are introduced later. The country must act quickly to ramp up domestic production to avoid long-term reliance on expensive imports. Europe, China, and others are expected to hit back with countermeasures, escalating tensions. If prolonged, this could strangle global trade, disrupt supply chains, and weigh on economic growth. Meanwhile, long-term investments, like semiconductor fabs and EV manufacturing, will become riskier in an environment of policy uncertainty.

In short, consumers can expect price hikes across the board, from iPhones to SUVs; for tech and auto executives, short-term turbulence is inevitable. The long game will be about staying focused on innovation. ADAS, software-defined vehicles, and next-generation chips will define market leaders. For policymakers, tariffs may be a negotiating tactic, but economic sustainability is questionable. Inflationary pressures could force a rethink sooner rather than later. These tariffs could be a short-term negotiating ploy or a long-term economic headache. Either way, the next few months will be crucial in determining whether this strategy strengthens the US economy or backfires spectacularly.