Potential Tariffs Could Create Tech Channel Obstacles

As IT spending continues to increase, the last thing MSPs want to see is an increase in the price of technology imports. With new tariffs implemented in 2025 on valuable trade partners like China, Mexico, and Canada, electronics manufacturers will see a significant hit.

Expected cost increases across tech products follow 2025 policy shifts

The US-imposed tariffs have also triggered retaliatory tariffs, ramping up a trade war in which businesses and consumers are the ones who will suffer the most damage.

These tariffs will impact consumer electronics assembled in China, Mexico, and Canada. U.S. companies will also see significantly increased costs for essential equipment such as laptops, desktops, servers, GPUs, and networking equipment. There are also fears that further tariffs could impact the price of semiconductors.

“These tariffs risk disrupting global supply chains for high-tech goods, including automobiles, electronics, and medical devices, increasing costs for American consumers and hindering U.S. economic growth,” Stephen Ezell, vice president of global innovation policy at the Information Technology and Innovation Foundation, said in a statement.

Industry leader on how organizations can adjust

As these IT budget pressures mount, organizations will have to explore ways to solve business problems on-site with as little infrastructure cost as possible.

Bruce Kornfeld, chief product officer at StorMagic– an edge data management company– has been tracking this issue and spoke to Channel Insider about what businesses can do to stay ahead of financial pressures caused by these tariffs.

“In the midst of navigating changing tariffs policies, businesses are anticipating how rising hardware costs, such as servers, GPUs, and networking gear will act as a catalyst for IT teams to rethink their infrastructure strategies,” Kornfeld said. “There has been significant innovation in processing power, storage efficiency, and virtualization, allowing organizations to reduce hardware dependence. Businesses that embrace cost-saving alternatives– whether by adopting hyperconverged infrastructure (HCI), reducing the number of servers, or moving off VMware– will be better positioned to navigate potential increasing IT hardware costs volatility.”

According to Gartner, further considerations for the global IT community include that IT spending will increase by 9.3 percent in 2025. Kornfeld says that businesses will need to find ways to stretch their IT budgets. This could mean prioritizing software-driven efficiencies, delaying non-essential upgrades, or identifying alternative technology partners that aren’t as impacted by cost increases. Being proactive by optimizing infrastructure and exploring cost-effective solutions will allow organizations to be less vulnerable to price hikes.

“Many businesses are realizing that traditional virtualization solutions such as VMware come with significant costs and complexities,” said Kornfeld. “Exploring alternative solutions can help reduce licensing fees and streamline IT environments. VMware is forcing customers to buy features that most do not need and significantly raising the cost of renewals. There are plenty of alternative hypervisors that are ‘right-sized’ for different environments and offer significant savings on software and can reduce the amount of hardware needed as well.”

Those who emerge from this trade war will need to find new ways to stretch their budgets and rethink traditional infrastructure models.

“Instead of continuing to build out large, on-premise environments, organizations should consider cloud adoption, all-in-one hyperconverged infrastructure, and other modern architectures that reduce hardware reliance,” Kornfeld continued. “The goal should be to maintain performance while cutting unnecessary infrastructure costs.”

The importance of flexibility and long-term planning

Given the shifting trade policies and their possible impacts on business strategy, Kornfeld advises IT leaders to align with their overall business goals by focusing on flexibility and not reacting too quickly to potential price increases. Instead, they should consider multiple scenarios and ensure their infrastructure strategy is resilient. He says this could mean diversifying suppliers, exploring software-driven efficiencies, or adopting a phased approach to hardware upgrades to avoid unnecessary spending.

Going forward, a renewed examination of cloud computing could be one way that organizations can balance their budgets if the tariffs impact the cost of acquiring IT hardware.

“One broader trend involves the use of cloud computing. For the last decade or more, many organizations didn’t think too much about the cloud because it was just ‘the way we do things,’” said Kornfeld. “But, the reality is starting to settle in and many are realizing that costs are starting to outrun the benefits. Cloud computing still has its place, but technology has evolved so much in cost, performance, and simplicity of management that on-prem computing should get another look. For instance, a small site– whether it’s 1 of 1,000 edge locations of an enterprise or a small business with one location, they can easily build a solution that runs all applications for under $10,000.”

The fallout of the implemented tariffs has yet to be determined. Organizations won’t be able to shift from buying essential IT equipment internationally to domestically overnight. Further tariffs or exemptions could be implemented, but until the landscape becomes clearer, businesses will need to stay as flexible as possible to weather the storm.

According to new research, profit and revenue trends for MSPs have been leveling out since the height of the COVID-19 pandemic. Read more about other financial trends poised to impact MSPs in 2025.