President Donald Trump’s ever-shifting trade war could cost the U.S. technology, media, and telecommunications (TMT) industry billions of dollars annually, according to a new PwC report analyzing the impact of ongoing tariffs. With heightened duties — particularly on imports from China — companies are scrambling to assess financial risks and rethink supply chains.
Total tariffs on the sector could soar from about $13 billion to $139 billion per year, according to the report. The analysis reviewed last year’s U.S. imports and assessed how they would have been affected by new tariffs on China, along with proposed — but currently paused — tariffs on some Canadian and Mexican goods. However, it did not account for retaliatory measures from other countries.
Dallas Dolen, PwC’s TMT Leader, told Quartz that while the figure is staggering, it is not entirely unexpected given the size of the industry.
“It’s not a shocking number when you actually scale it against the size of the business and the size of just the industry itself,” Dolen said.
The PwC report identifies computer, networking, and electronic equipment as the hardest-hit categories, with an estimated $64 billion in additional costs. Dolen pointed to the industry’s heavy dependence on Chinese manufacturing for this.
“The level of reliance on the supply chain coming out of China is undeniable, and by virtue of that, it’s sort of unavoidable,” he said.
A few companies have sought to diversify their production bases since the first Trump administration in anticipation of stricter U.S. trade policies. However, this takes time
“The speed at which supply chains can be replicated is the biggest challenge,” Dolen noted.
Companies are now responding to the new tariffs in several ways, according to Dolen. A small percentage are actively shifting supply chains away from China or reclassifying parts of their supply chains to bypass the new duties. Meanwhile, the majority are closely monitoring negotiations and preparing to act. Others are holding out for potential policy changes before making any moves.
Dolen emphasized it will take some time for consumers to feel the pressure from these tariffs. Unlike fluctuating oil prices, where costs change overnight, consumer electronics and enterprise technology tend to experience delayed price shifts.
“There isn’t a desire to be highly reactionary because the supply chain and even the retail side of the business is heavily reliant on consistency,” Dolen exlplained. “You don’t want to a scare people away and have a price that changes daily on something that’s sitting on the shelf.”
While companies may absorb some short-term profit losses, the true impact on consumers could take months to emerge.
However, the impact of these tariffs could extend beyond the tech industry, as most industries increasing rely on digital infrastructure. Dolen noted that many companies have integrated large language models (LLMs) into their cloud-based software platforms. As the cost of AI chips used to train these models rises, the ripple effects could be felt across multiple sectors.
“The industry effect of these items on tech actually has a really huge spread effect to nearly every other industry,” Dolen said.