The price of your next iPhone, smartwatch or AI server might be heading north - not because of innovation, but thanks to geopolitics.
That’s the message from UBS strategists in a note published Monday, warning that Trump’s sweeping new import tariffs could jack up hardware prices by as much as 25% and trigger a deeper earnings hit for global tech stocks.
It all comes down to a thicket of trade codes, parts lists, and global assembly lines. While some semiconductors (the tiny chips that power everything from phones to cars) have been exempted from the tariffs, many finished products haven’t.
So, if a graphics chip enters the US on its own, it might avoid duties. If it’s tucked inside a server, it could get slapped with a 10–25% tariff. It’s this murky middle ground that’s now sending shockwaves through tech supply chains.
As UBS puts it: “There is a lot of uncertainty about how the increased cost sharing will be done with suppliers, the extent to which costs can be passed on to end-customers, and the duration of tariffs”.
On 2 April, the Trump administration unveiled its most ambitious trade move yet, a “reciprocal tariff” regime designed to balance what it calls unfair trade terms.
All imports into the United States are now subject to a minimum 10% levy, with additional surcharges on around 90 countries, including key tech manufacturing hubs.
China, for instance, now faces a 34% tariff, rising to 54% on certain goods. That alone is a major problem for US tech firms, many of which rely on Chinese factories for final assembly.
UBS estimates that for high-end products like AI servers, tariffs could add hundreds of dollars to production costs.
Some of those costs might be absorbed by suppliers or swallowed in profit margins. But a good chunk, the strategists warn, is likely to be passed on to consumers, which could dent demand just as tech valuations were beginning to recover.
Investors may be experiencing a sense of déjà vu. In 2018, a similar burst of tariff anxiety led to a 20% drop in global tech stocks.
Earnings took a 12% hit, but the sector rebounded once trade tensions eased. UBS argues that today’s AI-fuelled optimism could offer a similar path to recovery - but not before more volatility.
So if your next iPhone costs more than you expected, you can blame trade policy, not a fancy new lens. And for investors, the message is clear: Tariff risk is back on the balance sheet.