The Impact of 2025 Tariffs on IT Hardware and Software Costs for Businesses

In 2025, new tariffs have been introduced or adjusted in key global markets, particularly between the United States and major manufacturing hubs like China. These tariffs have significant implications for businesses that rely on IT hardware and software. The costs of purchasing these items have increased, impacting businesses' budgets and IT strategies. As more companies continue to digitize their operations, the impact of these tariffs is most acutely felt by businesses that rely on essential IT infrastructure, including hardware upgrades, network expansions, and cloud infrastructure—components crucial for day-to-day business operations.

A tariff is a tax imposed on imported goods and services. For businesses in the IT sector, tariffs directly affect the cost of hardware and certain software components that are manufactured abroad. In 2025, tariff adjustments primarily targeted products such as laptops, networking devices, and server infrastructure. These tariffs are often the result of trade negotiations or strategic policies by national governments aimed at protecting local industries or addressing trade imbalances. The IT industry’s reliance on global supply chains for hardware manufacturing means that any changes to tariff rates can result in significant cost increases. Companies that have their products manufactured in China, Taiwan, or other Southeast Asian countries are facing tariffs on these products, which can lead to higher prices for businesses purchasing essential IT hardware.

The 2025 US-China trade agreement brought significant shifts in tariff policies, particularly for high-tech products. New tariffs were imposed or adjusted on consumer electronics, server hardware, networking gear, and wireless infrastructure.

• Laptops and PCs – The US has imposed higher tariffs on laptops and PCs, particularly those from Chinese manufacturers. This affects major brands like Lenovo, HP, and Dell, as well as the Microsoft Surface lineup and devices sold by other vendors.
• Servers and Networking Equipment – Companies like Cisco, HPE, and Aruba Networks face additional tariffs on their high-end networking hardware and servers. Tariffs on routers, switches, firewalls, and Wi-Fi access points are a concern for enterprises looking to upgrade or expand their IT infrastructure.
• Wireless Access Networking – Devices used in wireless access points, such as those manufactured by Aruba (HPE) and Cisco, are also subject to increased costs due to these tariffs. This is a concern for businesses expanding their wireless networks or upgrading to Wi-Fi 6 and 6E infrastructure.

The implementation of 2025 tariffs has raised prices for businesses purchasing IT hardware:

• The Cisco 9000 Series router may see an increase of 10-15%, making large-scale network upgrades more expensive.
• Aruba wireless access points and controllers could see prices rise by 8-12%, affecting businesses looking to scale their wireless networks.
• HPE ProLiant servers might experience a price hike of 12-20%, depending on the tariff levels applied to the manufacturing region.
• Hewlett Packard Enterprise (HPE) has already increased its server prices by approximately 8% in response to the higher tariffs imposed in 2025, forcing businesses to reconsider their infrastructure budgets.
• Cisco also reported in their Q1 2025 earnings call that the increased cost of manufacturing components in China and Taiwan, along with the tariffs, will likely raise the prices of Cisco Catalyst Switches by 5-10% by mid-2025.

While software itself is not directly impacted by tariffs, software-related IT costs could rise indirectly due to the increased prices of hardware. For example, businesses that need to scale their servers, networking infrastructure, or wireless networks to accommodate new software deployments might face higher costs. As businesses shift to more cloud-based solutions (e.g., Microsoft Azure, Amazon AWS), the higher costs of networking infrastructure (e.g., Cisco routers, Aruba wireless points) could lead to increased operational costs for cloud infrastructure. In the case of networking or server software licenses, the cost increase in hardware could lead to businesses being less likely to upgrade to newer versions of critical software, such as Microsoft Windows Server, Cisco Meraki software, or Aruba Central. This could impact security, compliance, and performance over time. Additionally, the price increase in hardware could indirectly increase IT service costs. For instance, companies may face higher installation or configuration fees for servers or networking gear due to the more expensive equipment.

To deal with the tariff increase, many businesses are revisiting their vendor relationships and exploring alternative suppliers or considering more local sourcing. For example, businesses that previously sourced their servers from Cisco may explore HPE or Aruba Networks if the cost differentials are more favorable. Some companies may look to suppliers outside of China or Southeast Asia to mitigate the impact of tariffs. For example, Microsoft Surface laptops could see a price increase, leading businesses to consider alternatives like Apple MacBooks or Lenovo ThinkPads that are manufactured in other regions with less tariff impact. Aruba may find itself competing with more cost-effective Ubiquiti or Ruckus networking solutions, as businesses look for price-conscious options without sacrificing performance. To avoid up-front costs, businesses might also explore leasing options for their IT hardware or increase their investment in cloud-based services instead of on-premises solutions. This could help offset some of the additional costs tied to purchasing physical hardware.

Conclusion: The tariffs implemented in 2025 have had a significant impact on the costs of IT hardware for businesses. Devices like laptops, servers, networking equipment, and wireless access points from key vendors like Microsoft, Cisco, Aruba, and HPE have seen price hikes ranging from 5% to 20%, impacting company budgets. While the direct effect on software costs has been minimal, businesses may face higher operational expenses due to the increased cost of the underlying hardware and infrastructure. Businesses will need to adapt to these changes by rethinking their purchasing strategies. Whether through vendor diversification, shifting to cloud solutions, or considering alternative sourcing for hardware, the IT landscape in 2025 is one that requires careful planning and flexibility. Companies will need to stay agile as tariffs and trade agreements continue to evolve.

Let’s Talk: How is your company dealing with the impact of 2025 tariffs? Have you adjusted your IT purchasing strategy, or are you exploring alternative vendors or sourcing regions? We are here to help.