IT industry faces Trump tariff challenges, but growth still expected

Trump's proposed tariffs on Chinese goods will hurt the global IT industry. However, global IT spending as well as smartphone and PC shipments are expected to grow.

Tariffs on technology imports, which the Trump administration is likely to implement, could seriously limit IT usage, a report by a leading Credit Rating provider, S&P Global Ratings, forecasts.

Trump, who is soon to be inaugurated as US president, has previously said that he would impose tariffs on Chinese goods that could reach 65%. S&P highlights that if tariffs are imposed, China would likely reciprocate with similar barriers on US exports to the country, further damaging the US economy.

“We assume that such tariffs could be managed over time by most hardware providers by passing on much of the incremental costs to end users and through supply chain reallocation,” the report reads.

However, despite uncertainty, S&P forecasts that global IT spending will grow 9% this year, surpassing the previous year’s growth. Meanwhile, the Gross Domestic Product is expected to rise by 3%.

The report also provides an overview of separate IT segments and shipments of consumer devices.

Smartphone shipments, for example, are expected to increase by 2.4%, compared to 5.7% growth last year.

Apple may reportedly benefit from stabilizing US market demand and its AI software. However, iPhone sales will likely face challenges due to regulatory barriers and local competition.

Some Android manufacturers are likely to underperform compared to iOS. According to the report, Samsung may experience a limited increase in smartphone shipments due to lower-end smartphones offered by Chinese smartphone makers, including Xiaomi, Transsion, and Honor.

Meanwhile, PC shipments are expected to rise 3%, up from 1% in 2024. The growth will be driven by replacements following the end of support for Windows 10.