Navigating the New U.S. Tariffs in Tech: Impact on SMB IT Budgets and Supply Chains

The U.S. technology industry is reeling from the recent tariff developments imposed on China by the current administration. Other key industries such as the construction, manufacturing, and automotive industries, have seen similar tariff changes, causing turmoil across many American sectors. These developments will affect small to medium businesses in the United States for weeks and months to come, with many unsure of the impact these tariffs will have on their ability to do business and stay afloat in these uncertain times. While the details regarding the specific amount and type of products impacted by the tariffs are fluid on a daily basis, let’s explore what we know and how recent developments may impact your business. We will also look at long—and short-term strategies to help your business navigate these uncertainties.

What Are the Recent U.S. Tariff Developments?

As of this writing, the development of U.S. trade tariffs on tech and electronics is in limbo. What we do know about the two particular types of trade tariffs that will impact our industry going forward is evident in the Section 301 Tariffs and the Section 232 (National Security Tariffs).

Section 301 Tariffs

The Section 301 Tariffs are ongoing tariffs on approximately $370 billion of Chinese imports since 2018. Many of these imports are technology components that carry a 25% duty and were announced months in advance, allowing companies to adjust their strategies accordingly. “For example, the 25% tariff on Chinese semiconductor materials that took effect on September 27, 2024, was announced over four months in advance, on May 14, 2024. Similarly, the decision to increase that tariff to 50% on January 1, 2025, was also pre-announced.” (Systel)

Section 232 (National Security) Tariffs

This series of trade tariffs is based on Section 232 of the Trade Expansion Act of 1962, which authorizes the president to adjust imports if the quantity or circumstances of imports threaten to impair national security. This was initially used on steel and aluminum, and it could now be expanded to tech goods such as Smartphones and other tech products used by many small and medium-sized businesses. On April 14, 2025, The Wall Street Journal reported that Commerce Secretary Howard Lutnick responded in an interview on This Week that “smartphones and other tech products that won an exemption Friday night from the latest so-called reciprocal tariffs will still face separate levies in a month or two as part of a trade investigation into semiconductors.” These tech products were added and then listed as exempt within hours of announcements, making it a challenge for businesses that use these components to keep up with the changes and are unable to strategize accurately for their industry. Additionally, Reuters reported at the beginning of April that these types of tariffs could disrupt data-center equipment supply chains and cause tech giants like Apple, Nvidia, and Dell to reallocate spending due to their impact.

U.S. Reciprocal Tariff Announcement

According to USA Customs Clearance, the White House announced on April 2, 2025, that it had solidified the plan to issue reciprocal tariffs on various nations, including China. Since then, both China and the U.S. have imposed multiple tariffs on one another. The U.S. currently has a 125% tariff on China, but this could likely change in the future. Due to the fast-paced implementation of these tariffs and the fluidity of the specific items that will be impacted, a wide range of technology items and components may be impacted. Please be aware that these are subject to change.

Tech Equipment Likely to Be Impacted

Using the information currently at hand, here is some of the tech equipment you should be aware of that may be impacted by the U.S. trade tariffs.

Computing Devices

Given that it was recently revealed that the US had excluded smartphones, computers, and other consumer electronics from tariffs only on a temporary basis, many computer devices, such as laptops, desktops, and tablets, especially those made in China, are likely to be included in these tariffs. Additionally, significant OEMs like Lenovo, HP, and Dell face higher import costs (New York Times )

Networking Gear

Networking gear, including routers, switches, firewalls, and Wi-Fi access points, may also be subject to increased tariffs. Firewalls and SD-WAN appliances built in tariffed regions will similarly jump in cost, impacting security project budgets.

Servers & Storage

Add to the list of tech equipment that will likely be heavily impacted by these tariffs: Enterprise servers assembled in China or Taiwan now carry steeper import taxes. HPE has already raised server prices by approximately 8% in response to 2025 tariffs.

Power & Infrastructure Hardware

Items like uninterruptible power supplies (UPS units), data center racks, and power distribution components often have Chinese-made parts and are thus also included in the components that will see an increase in costs.

Previously Exempted Tech Goods

Many products that were not included in earlier tariffs could now be included, such as smartphones, monitors, mobile devices, and other peripherals that may need to be budgeted for.

SMB Strategic Planning: Long and Short-Term Recommendations

Given the volatility and uncertainty of these tariffs, it is critical for small and medium-sized businesses to start planning now for both short-term and long-term policies that can help them weather this storm. Small business owners should focus on ways to mitigate the economic burden of tariffs with actionable steps in the coming weeks and months.

Review Suppliers

In the short and long term, SMBs should mitigate risk by expanding their vendor and supplier bases. For instance, they should review current contracts to determine if they are still favorable deals. New or local suppliers may be able to offer lower prices or a more flexible arrangement. By expanding your supplier network, your business will reduce reliance on a single supplier from a single country that may be tariffed in the future. Expanding the vendor network will protect your business from soaring prices and allow you to find the best option as the tariffs roll out.

Procurement Timing and Inventory

A great way to offset the impact of the increase in costs caused by the tariffs is to time your purchases strategically. If a credible news source indicates a tariff increase on a needed product next quarter, consider buying early or even stockpiling essential gear at current prices. (Source Canalys) Conversely, it is recommended that small businesses avoid panic-buying excess inventory that ties up cash in the wrong areas. A managed service provider can help identify which components are at high risk and which have stable supply chains, to strike a balance between preparedness and panic buying.

Scenario Planning & Contingency Plans

As a tariff war drags on, it’s in a business's best interest to play out long-range scenarios, focusing on where budgets can be cut or reserved for another time. Make contingency plans if plan A, B, or C falls through. Prioritize your budgeting to make sure critical security issues, such as upgrading firewalls and server upgrades, can be completed, but less emergent tasks can be done further down the road. Executive-level leaders should ensure their IT and finance teams have detailed contingency plans, such as “if tariffs go X, we will do Y,” to avoid knee-jerk reactions.

Leverage Distributors & Partners

Now is the time to start leaning in on the relationships your business has been building for years. Does your IT partner offer price hold programs or bulk-buy opportunities that could save your budget for other items that may be subject to the trade tariffs? If so, take advantage of these and rely on your partners to get you the best deals.

Monitor Tariff Changes

While the tariff announcements may be giving many business owners whiplash, it is a good idea to assign a team member (or better yet, an expert) to monitor the changes going forward. Knowing what is on the horizon is important to getting ahead of any changes that may impact your industry. Tracking the changes may require partnering with trade experts or your business partners to stay updated on the latest news.

Key Takeaways

Protective and reciprocal tariffs are here and potentially here for the foreseeable future. The uncertainties of what this may mean for small businesses are widespread, but with a proactive stance and informed planning, SMBs will be able to mitigate the impact on their operations. By planning in advance for inventory, reviewing supplier contracts, leveraging partnerships, and monitoring the tariffs, it is possible to navigate this new landscape. Now is the time to evaluate your business's assets and connection to the trade tariffs. If you are unsure of how this will impact your bottom line and your workforce, talk to one of our team members. We have been carefully monitoring how these economic changes may impact our clients. Contact us at Spectra Networks, as we are here to help your small business navigate this tumultuous time.