Proposed New Tariffs Threaten Higher Electronic Component Prices in 2025

New tariffs proposed by the incoming Trump Administration could lead to higher electronic component prices in 2025. President-elect Donald Trump has announced he would impose new tariffs when he takes office, targeting the United States’ biggest trade partners – Canada, Mexico, and China.

While the final tariffs could change before the President-elect takes office, Trump said he would implement a 25% tariff on all products imported from Canada and Mexico. The new administration would also add an additional 10% to existing tariffs on imports from China.

How New Tariffs Can Make Electronic Component Procurement More Expensive

If adopted, the new tariffs could create expensive challenges when procuring electronic components in 2025. Semiconductor tariffs have already increased this year after the Biden administration raised the tariff on semiconductor imports from China to 50% as part of reinforcing its investment in US-based chip production through the CHIPS Act. If the incoming administration continues with the proposed 10% increase, semiconductors from China would see a 60% import tariff.

According to the United States International Trade Commission, China and Mexico are the two largest exporters of electronics to the United States as of 2023.

• China is the largest exporter of electronics to the US, with $145.9B worth of electronics imported.
• China also accounts for 24.7% of all electronics imported into the US.
• Mexico is the second largest exporter of electronics to the US, with $103.4B worth of electronics imported.
• Mexico controls 17.5% of all electronics imported into the US.
• China and Mexico together account for 42.2% of all electronics imported into the US.

A significant portion of electronics are imported to the US from Mexico and China, so we can expect prices to rise if the incoming administration follows through on the proposed tariff hike.