Network Switches
Sourcing Guide & Market Intelligence

Tariffs to escalate prices for electronics and computing equipment

• The Trump administration’s reciprocating tariffs, which will increase the tariff on all products imported from nearly all US trade partners, are set to take effect on August 7 and are likely to drive price increases across a wide range of sectors.
• The United States is highly reliant on imported electronics, communication equipment, and computing devices, having imported more than $472 billion worth of electronics in 2024, or about half of the total domestic supply. Starting August 7, imports from key computer and electronics producers such as China (54,0%), Japan (15.0%), South Korea (15.0%), Thailand (19.0%), Vietnam (20.0%), and Taiwan (20.0%) will be subject to new tariff rates. Trade deals for many countries are still being negotiated, and these rates are subject to change.
• For this reason, the US electronics industry is highly exposed to price increases and supply chain disruptions when the tariffs take effect. For example, the cost of iPhones, which are predominantly manufactured in China, could rise by as much as 43.0% in response to tariffs, according to projections by Rosenblatt Securities.
• Overall, the Yale Budget Lab anticipates tariffs will increase the average cost of computers and electronics by 18.7% in the short term.
• The tariffs exempt semiconductors, limiting the cost increases for domestic electronics manufacturers, but the lack of domestic electronics assembly capacity means that this exemption will have a limited effect.

China bans exports of rare minerals to the United States

• On December 4, China announced a ban on all exports of gallium, germanium, graphite, and antimony to the United States, escalating existing trade restrictions on these materials.
• China is the leading global producer of each of these metals, producing 98.3%, 67.9%, 62.0%, and 48.2%, respectively, of the world’s gallium, germanium, graphite, and antimony supplies, respectively.
• The United States can still access these resources from other trade partners who make up most of the remaining global supply of the impacted commodities, such as Canada, Japan, and Brazil.
• However, the loss of supply from China, the leading producer of these materials, will increase prices and supply chain risk in a range of markets that rely on the affected metals, such as the semiconductor, batteries, and solar cell markets.
• China’s export ban on these materials is in retaliation to expanded US export bans on advanced semiconductor manufacturing equipment and technologies to China announced two days prior. This ongoing trade dispute adds further uncertainty to technology markets, which are often reliant on components and materials exported from China.

The FBI has warned that Chinese government hackers could disrupt critical infrastructure in the United States in the event of a conflict with China.

• The FBI announced on January 31 that it had thwarted an attempt by the Chinese government hacking group “Volt Typhoon” to plant malware onto electric power, water treatment and transportation systems in the United States using compromised end-of-life small office/home office (SOHO) routers from Cisco and Netgear. End-of-life devices have been discontinued by manufacturers and no longer receive software patches to eliminate vulnerabilities, which makes these devices attractive targets for hackers.
• US officials assess that China might disrupt critical US infrastructure to prevent the United States from responding to a Chinese attack on Taiwan. Volt Typhoon has been particularly active in Hawaii and Guam, which house some of the largest US military and naval installations in the Pacific.
• The FBI announced on September 18 that it had disrupted a botnet from another Chinese government hacking group known as “Flax Typhoon”. Flax Typhoon had infected 260,000 networking devices around the world, including SOHO routers, internet protocol (IP) cameras, digital video recorders (DVRs), and network-attached storage (NAS) devices.n
• The Cybersecurity and Infrastructure Security Agency (CISA) recommends that organizations use its Known Exploited Vulnerabilities (KEV) Catalog to identify any vulnerabilities in their systems. Furthermore, organizations can subscribe to receive KEV Catalog updates from the agency and may contact the agency for advice.