Tariff uncertainties linger for tech companies, US lawmakers

Vietnam saw tech companies migrate their supply chains to its shores during the COVID-19 pandemic. Source: Jiraroj Praditcharoenkul/iStock/Getty Images Plus via Getty Images.

Volatility in global markets and US trade policy has raised questions about how enterprises, US lawmakers and international leaders will respond to ongoing uncertainty around tariffs.

The Trump administration announced a sweeping series of import duties on April 2, leading to historic declines in the stock market. A week later, stocks soared after President Donald Trump announced a 90-day pause on most reciprocal tariffs, including a blanket 10% tariff on all imports to the US. At the same time, China's retaliatory tariffs on US exports rose to 84%, leading the US to raise tariffs on Chinese imports to 125%. On April 10, the administration clarified that the tariff rate on Chinese goods was 145%. As of April 11, China further raised tariffs on US goods to 125% from 84%.

The rapidly evolving environment and the escalating tensions between the US and China are clouding the economic outlook for US tech businesses, large and small. Analysts said they expect tech companies to not issue guidance on their upcoming earnings calls due to the current macroeconomic instability. With much at stake on Wall Street, Main Street and in Silicon Valley, lawmakers are considering bills that would limit Trump's ability to impose tariffs without Congressional approval.

"Trade retaliation doesn't fall on everyone evenly," Sen. Todd Young (R-Ind.) said at a Senate Finance Committee hearing this week, noting that Trump's trade policy was "creating some anxiety" among Young's constituents. "It has a different impact on a New York tech firm than it might have on a Hoosier soybean farmer. Unpacking those trade-offs for the American people is going to be very important moving forward."

Mainland China in question

While Trump paused reciprocal tariffs on most countries on April 9, his executive order increased tariffs on goods from mainland China to 125%. On April 10, the White House said that was in addition to a 20% fentanyl-related tariff — effectively raising the tariff rate on Chinese goods to 145%.

"At some point, hopefully in the near future, China will realize that the days of ripping off the USA, and other countries, is no longer sustainable or acceptable," Trump said in an April 9 post on Truth Social.

In response to an inquiry from S&P Global Market Intelligence, a spokesperson for the Chinese Ministry of Foreign Affairs referred to statements Guo Jiakun, the ministry's top diplomat, issued in an April 2 news conference. Jiakun said Trump's tariff hikes violate World Trade Organization rules, adding "trade wars and tariff wars have no winners."

"China-US economic relations should be mutually beneficial and win-win in nature," a spokesperson for the Chinese Ministry of Foreign Affairs said in a subsequent statement April 5.

The tariffs on mainland China are being challenged in US courts. The New Civil Liberties Alliance (NCLA), a conservative legal group, filed a complaint in the US District Court for the Northern District of Florida on behalf of business owner Emily Ley, who depends on materials imported from mainland China that cannot be sourced in the US. Specifically, the suit challenges Trump's use of the International Emergency Economic Powers Act, a law that gives the president broad authority amid national emergencies, as a legal justification for tariffs.

"By invoking emergency power to impose an across-the-board tariff on imports from China that the statute does not authorize, President Trump has misused that power, usurped Congress' right to control tariffs and upset the Constitution's separation of powers," said Andrew Morris, one of three NCLA attorneys representing Ley and her business, Simplified.

EXPLORE: Our Trump 2.0 page offers more coverage of tariffs and their impacts, along with additional Trump administration policy developments.

Trade partners

Outside of mainland China, questions remain about what will happen following the 90-day pause on reciprocal tariffs. Prior to Trump's April 9 announcement, the countries hit hardest by Trump's tariffs included a few key players who have emerged as alternatives for tech companies looking to reshore production and assembly outside of China.

Vietnam saw tech companies migrate their supply chains to its shores during the COVID-19 pandemic. Under the April 2 announcement, a 46% import duty was going to be assigned to imports from the Southeast Asian nation.

Year to date, Vietnam has exported 4,212 shipments of electronic equipment, software, hardware, semiconductor equipment and telecommunications equipment to the US, valued at $1.7 billion, according to Panjiva data. Exports in the same categories accounted for $7 billion across 15,000 shipments in 2024.

Taiwan, home of Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), accounted for $3 billion in export value since Jan. 1, with nearly 10,000 shipments. In 2024, it delivered $12 billion in value via approximately 37,000 shipments.

Analysts say tariffs could result in TSMC reining in its chip-on-wafer-on-substrate (CoWoS) expansion. CoWoS capacity — considered a bottleneck for AI chips — was forecast for 90,000 wafers per month in 2026 by Morgan Stanley, up from 70,000 so far this year. The 2026 mark is down from a consensus view of 105,000 to 125,000 wafers per month. Goldman Sachs lowered its TSMC 2026 capital expenditure estimate by $1 billion and reduced its shipment forecasts by 2% for 2025 and 5% for 2026.

"If Trump thinks he is going to bully his way into AI dominance with tariffs, he should look at the supply chain leverage of ASML Holding NV, TSMC, Tokyo Electron Ltd., Samsung Electronics Co. Ltd., SK hynix Inc., Arm Holdings PLC, [ZEISS Group subsidiary] Carl Zeiss Optics and dozens of others," Rep. Bill Foster (D-Ill.) told Market Intelligence. "The AI supply chain is scattered throughout our allies in the free world."

Taiwan President Lai Ching-te said in a recorded address April 6 that he planned to negotiate with the US to improve upon the 32% reciprocal tariff announced April 2 on Taiwanese imports. To accommodate new and emerging US negotiating conditions, Lai said Taiwan plans to expand US purchases to reduce the US trade deficit with Taiwan and eliminate nontariff barriers to trade.

Trade officials from Japan, South Korea and China met in Seoul late March to pursue a free trade agreement between the three nations, according to a report from The Japan Times.

Congress pushes back

A longer term question for executives and foreign leaders is whether US lawmakers at the Congressional level will continue to support Trump's tariff plans.

Sen. Maria Cantwell (D-Wash.) is among a group of Democrat and Republican senators backing the Trade Review Act, which would require the president to notify Congress within 48 hours of imposing a tariff on imported goods. The bill also stipulates that tariffs set by the president would sunset within 60 days unless passed by Congress. The bill gives Congress the power to terminate tariffs through a joint resolution of disapproval.

Sen. Chuck Grassley (R-Iowa) and former Republican Senate Leader Mitch McConnell of Kentucky are among the supporters of the bill. It has also gained the support of the Consumer Technology Association and the National Retail Federation.

"Arbitrary tariffs, particularly on our allies, damage US export opportunities and raise prices for American consumers and businesses," Cantwell said. "As representatives of the American people, Congress has a duty to stop actions that will cause them harm."

Rep. Don Bacon (R-Neb.) unveiled a companion bill in the House on April 8 with the backing of Republican colleague Jeff Hurd of Colorado and Democrats Josh Gottheimer and Gregory Meeks of New Jersey and New York.

"The Constitution clearly gives the authority for taxes and tariffs to Congress, but for too long, we have handed that authority to the executive branch," said Bacon. "This is less about the actual tariffs laid by the Trump Administration, some of which I support because they are reciprocal, but more a commitment to uphold the Constitution. Congress has the power of the purse."

Rep. Don Beyer (D-Va.), one of five House Democrats who introduced the Reclaim Trade Powers Act, told Market Intelligence on Capitol Hill he did not want to interfere with Bacon's effort, but was encouraged to see his colleague from across the aisle working to restore trade authority to Congress.

"I'm really glad he's doing it ... I think we're gonna let it play out," Beyer said. "One of the things I don't want to do is hurt Don Bacon's ability to build Republican support. If you get a bunch of Democrats signing up to it, it becomes more difficult for Republicans."

The White House, meanwhile, said it would veto the Trade Review Act, Senate Majority Leader John Thune confirmed to reporters.

Picking battles

The diversity of thought in Congress reflects how nuanced and complex the debate over free trade versus fair trade has become, said Daniel Pickard, international trade and national security practice group leader at Buchanan Ingersoll & Rooney.

"Congress isn't monolithic in its thinking about this," Pickard said. "There's a wide range of positions, from those who solidly support the president and don't believe that any congressional action is necessary, to those who are advocating for very modest changes, for example, just a joint resolution in regard to the [International Emergency Economic Powers Act] authorities."

With so many unknowns, analysts say it is hard for companies and investors to predict the end result from the current tariff negotiations.

"If the Trump tariffs lead to a global negotiation to bring down tariffs across the board and among most countries, this could lead to a 'home run' as inflation would cool dramatically, and global GDP growth would accelerate materially," Stifel AI research analysts Adam Borg, Brian Chin and David Grossman wrote. "Should the tariffs 'stick' with most countries (and especially the EU and China) retaliating, this could lead to a deep recession, perhaps even an economic depression."

As negotiations between the Trump administration and affected nations unfold and litigation advances, the rollout of the tariffs will continue to be a work in progress, Pickard said.

"There's so many different moving parts to this that could come out a bunch of different ways," Pickard said. "The judiciary is going to have something to say. Congress is going to have something to say, if it wants, and the executive branch is still going to have something to say."