Is your tech budget ready for 145% China tariff? Cyber pros warn about consequences

A 145% surcharge on goods from China will further stress IT budgets, which were already expected to increase. Everything from a simple home WiFi router to enterprise firewalls, network equipment, and even cloud services will be affected.

In 2019, restrictions on a single company, Huawei, disrupted the deployment of 5G infrastructure and forced companies to look for alternative vendors. This extended timelines by up to 12 months and drove up costs.

Security experts warn that a 145% tariff on goods from China will have far-reaching consequences for hardware prices, product availability, various IT services, and vendors.

Retailers are already hiking prices, and the alternatives will be dire as most supply chains pass through China. Most cybersecurity-related products – servers, network appliances, firewalls, intrusion detection systems, and even endpoints – are made in China or use Chinese-made components.

China processes raw materials and rare earths, makes circuit boards, chips, casings, or displays, assembles, packages, and ships the final products to your door.

“If tariffs on China remain or increase, I think we’ll see a gradual rise in cybersecurity appliance costs, especially on the budget end. Supply constraints could also slow down availability,” warns Akash Mahajan, founder and CEO of Kloudle, a cloud security platform.

“Larger vendors might shift manufacturing outside of China over time, but smaller brands and resellers could struggle, especially in keeping prices low for small and mid-sized organizations.”

IT hardware companies operate with much tighter margins and competitive cost structures than many other goods, which means that tariff-induced cost increases are more likely to be passed on to consumers.

This comes at a time of economic uncertainty when companies and users might consider delaying essential upgrades, exposing them to additional risks.

A threat to IT budgets

According to Gartner's estimate from last year, worldwide IT spending is expected to increase by 9.3% in 2025.

“Imagine having your IT budget set at the beginning of the year, only to find that the prices of these essential items have surged by 10%, 20%, or even 25%. This scenario adds another layer of pressure on already tight budgets,” warns Bruce Kornfeld, Chief Product Officer at StorMagic, a tech company that provides storage and security solutions for edge computing environments.

“Tariffs are becoming a critical consideration for IT departments across the US.”

US companies could face significantly increased costs for essential tech equipment, including laptops, desktops, servers, GPUs, and networking gear.

If tariffs persist for months or years, or additional measures are imposed, small businesses may struggle to absorb increasing costs, warns Jeff Orr, Director of Research, IT and Technologies at Information Services Group, an AI-centered technology research and advisory firm.

The costs might cascade down to cloud services

The first impact of the new tariffs is direct: imported physical products, such as firewalls or routers, are becoming more expensive.

According to Reuters, Chinese sellers are already preparing to hike prices for the US market or quit it altogether.

However, many secondary effects are also expected.

“Significant price changes and availability issues have not been observed on cloud hyperscaler platforms like AWS, Google Cloud, IBM Cloud, Microsoft Azure, and Oracle Cloud Infrastructure (OCI),” Orr notes.

“Enterprises should monitor cybersecurity cloud service costs closely to make informed purchasing decisions. Import tariffs would increase the cost of electronic components and sub-systems (GPUs, storage, power, environmental controls, etc.) used in the development and maintenance of data centers, which would ultimately be passed through to customers.”

Mahajan agrees. Most cloud services run on massive infrastructure that still relies on globally sourced hardware, including from China.

“While the 90-day pause gives some breathing room for non-China vendors, the core infrastructure – like servers, switches, and storage – remains affected, and that could ripple into service pricing later,” Mahajan said.

Orr believes that cybersecurity vendors such as Check Point, Cisco, Fortinet, Juniper Networks, and Palo Alto Networks are likely to be impacted as well. Reliance on contract manufacturing in China will drive the costs of production and components upwards.

Increasing costs “would likely be passed on to customers, potentially affecting market competitiveness and pricing strategies,” Orr said.

Home users, tinkerers, and small firms will feel the pain

Cybersecurity experts warn that home users and prosumers should also make sure their tech gear will last and get updates for a while. Tariffs will adjust the prices of WiFi routers and everything else.

Many prosumers choose open-source software, such as pfSense or OpenWRT, to run their networks, but the budget hardware most often comes from China.

“That’s a concern I’d take seriously. Even though pfSense and OpenWRT are open-source and free, they still need compatible hardware to run on – and a lot of affordable networking gear is Chinese-made,” Mahajan from Kloudle said.

“We’ll likely see higher prices and limited availability for the lower-cost hardware these projects rely on. This could hit small businesses hardest, making it tougher for them to maintain solid security without stretching their budgets.“

The experts suggest for those relying heavily on equipment from China or with Chinese components, that it might be time to look for alternative vendors based in other regions.

“It’s smart to extend hardware refresh cycles where possible or buy ahead if you suspect price hikes. On the software side, lean into cloud-native and open-source security tools that don’t depend on expensive physical appliances,” Mahajan said.

Kornfeld suggests organizations explore ways to solve problems with “as little infrastructure cost as possible” and look for other savings.

“One way to keep costs from spiraling out of control is to lower the dependence on VMware by Broadcom by considering alternative virtualization solutions that offer cost savings and eliminate the extra bloat.”

Are tariffs all bad for cybersecurity?

Cyber pros can’t think of many hidden benefits or upsides tariffs could bring.

“There’s a possible upside in the long term. Trade pressure may encourage diversification and more local manufacturing, which could help improve supply chain resilience. We might also see new regional vendors enter the market, increasing competition and innovation,” Mahajan said.

“But realistically, in the short term, these changes will mean higher costs and slower access, especially for resource-constrained teams.”

Orr hopes investors will increase their focus on domestic US manufacturing and cybersecurity innovation as businesses seek alternatives to imported products. This shift could lead to heightened investments in local solutions and potentially bolster the cybersecurity ecosystem.

But for the time being, “tariffs manifest as challenges.”