Trump tariffs on Canada, Mexico, and China could upend tech and auto industries

The news: President-elect Donald Trump’s planned tariffs on Mexico, Canada, and China could threaten global supply chains and drive up costs for tech imports like semiconductors, displays, EVs, smartphones, and laptops.

Trump stated on Truth Social that his administration’s first order of business would be to “sign all necessary documents to charge Mexico and Canada a 25% tariff on ALL products coming into the United States.” He said he also plans to impose an additional 10% tariff on all Chinese goods.

Why it’s worth watching: The end result of any proposed tariffs would be an increase in manufacturing costs, which would inevitably be passed on to consumers. Companies like Apple and Dell, as well as various automakers, could face tough decisions on pricing and profit margins.

• To mitigate tariff impacts, tech companies may accelerate plans to diversify manufacturing hubs. Moving operations from China to Southeast Asia, the US, or other countries could improve resilience but raise costs in the short term.
• Being heavily reliant on just-in-time supply chains could cause reduced innovation and disrupted product launch cycles, especially for in-demand goods like AI hardware and consumer electronics.
• EVs using Chinese and Canadian components, or that are assembled in Mexico, could cost more. High up-front costs are the biggest barrier to EV adoption, per Capgemini.

Trade is a two-way street: Tariffs could be countered with similar trade regulations, potentially escalating a trade war between long-standing partner countries.

• Canada could impose duties on US goods like steel, aluminum, and dairy products while increasing the cost of oil and hydroelectric supplies to the US.
• China has the option of limiting exports of rare-earth metals critical for US technology and component manufacturing—creating bottlenecks for electronics and commercial goods.
• Similarly, Mexico could impose additional tariffs on US exports like agricultural goods and machinery.

Our take: Tariffs could bring in billions of dollars and shield companies from foreign competition, but they could also set off a chain reaction that escalates costs not just for the countries concerned, but for a highly interdependent global economy.

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