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Tariff the bandage.
As a new administration prepares to take over the White House, threats of aggressive tariffs have some tech companies feeling nervous.
President-elect Donald Trump won in November on a campaign that promised to restore US jobs. That pledge included a reliance on tariffs, which could negatively affect the country’s AI and chip industries.
Companies like Nvidia and AMD are already putting plans in place to avoid the tariffs by urging their partners to increase production before the tariffs take effect. Meanwhile, Silicon Valley elites are petitioning Trump at Mar-a-Lago for passes and exceptions to his edicts. And as the New York Times reported, the tariffs may imperfectly affect China, which avoided the worst of them during Trump’s previous term.
Pushing forward. But, as Coresight Research CEO Deborah Weinswig told IT Brew, companies will have to innovate. Supply-chain concerns, especially for firms with contracts in China and Mexico, will become more important.
“Companies who have dragged their feet on thinking about the innovation around supply chain, they can’t drag their feet anymore,” Weinswig said. “I think there will be a lot of spending on supply-chain innovation.”
On the other hand, the cost of any tariffs will ultimately be passed down to consumers. That could lead to economic tightening, loss of jobs, and restricted spending on IT, which in turn can have negative effects on security and operations.
The incoming Trump administration will be taking on a host of tech-related issues, raising questions about how much rocking the boat the White House will be willing to do. Jay Trinckes, data protection officer at Thoropass, told IT Brew in December that for all the political bluster he sees the new administration taking a measured approach to the sector.
“The new administration is going to come in, they’re going to see the good and the bad about certain things,” Trinckes said.
Ultimately, Weinsig said, the tariffs could be seen as the beginning of a positive shift in the way the tech industry operates, something of a jumpstart.
“There may be things that we can all figure out, sitting down together—that is the intended consequence of a lot of this, a lot of these tariff proposals,” Weinswig said.