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New Tariffs Disrupt Tech and Auto Industries while also raising costs. 💰
President Trump’s new tariffs on dozens of countries are shaking global markets and hurting major companies like Apple, Amazon, and carmakers by raising costs and causing delays.
Apple expects to pay $1.1 billion in tariffs this quarter, and Ford Motor Company estimates $2 billion for the year. The tariffs aim to fix trade imbalances but are disrupting supply chains, slowing product launches, and raising prices.
Job growth is also slowing, and experts warn the economy could suffer more if costs are passed to consumers. Some believe the pressure will speed up the use of AI as companies look to cut costs.
This and more on the Tech Field Day News Rundown with Alastair Cooke and Jeffrey Powers.
#TFDRundown#Tariffs#SupplyChain#ProductLaunches
It's time for us to take a little bit of a closer look. And it's a topic that's getting a lot of mainstream news coverage and is definitely impacting some of the organizations we care about. And it's President Trump's new tariffs on dozens of companies that are shaking global markets and hurting major U.S. companies like Apple, Amazon and car makers. What's going on is that they're increasing the cost of materials and products that are coming in, and they're uncertainties are leading to fairly significant delays in some of those things being shipped. Apple themselves expect to pay, paying about $1.1 billion in tariffs just this quarter and Forward estimates $2 billion for the entire year. That's money that's being paid by American consumers. And so the government's tax funding the tariffs still aim to fix the trade imbalance. And the tariffs are being levied against cut foreign companies that sell more products to the United States than they buy from the states. And the objective is that this makes it more competitive. The US based companies to build things and this takes a while and there's our problem. There's a big lag time between having this tariffs come in and the jobs and the productivity on ashore that the tariffs are supposed to encourage. Uh, right now job growth is slowing because we have that latency between we have that delay of higher cost for products, but we don't yet have the ramped up production domestically and it's likely to be some time for that. Experts warn that the economy could suffer as it slows down and more costs are passed on to consumers. And of course, AI rears its head that some people believe that this AI tools are going to be used to eliminate the people cost and lead to a reduction in employment. Now, historically we've seen this panic that every new technology is going to take away jobs and yet don't have fewer jobs working in IT. We have more jobs caring and feeding those. Changes overtime. So I think it's interesting to see that there's a, a large list of companies that are having tariffs levied against them here. I live in New Zealand, we have a 15% tariff as being levied against New Zealand because we send you more wine and share cheese and dairy products or other other meat products than we get from the United States. And you know, there's, there's this imbalance. The president does say that tariffs are vital and that there's no chance for US survival or success without these these tariffs. But I think he's a little uncomfortable with the fact that there is a lag between putting the tariffs in and and the actual upsurge of US manufacturing and employment. And so This is why we saw a bit of a knee jerk reaction to the news that the rate of increase of employment in the United States has gone down. It's below the the average of 130,000 jobs a month, while 73,000 jobs added in in July. And that wasn't welcome news. Jeff, are you seeing confidence here? But I'm not in the United States. I only see the second hand. Are you seeing confidence and comfort in in the United States as a result of these tariffs? Uh, before I answer that, I'm going to have to invoke my 30% tariff that just happened. So once I get paid for that then I can reply. OK, now we're good. Umm, so. Is this is this is just this is amazing how one person can think that. Doing something like this is going to help overall when it has been proven time and time again that it does not work, that going back to that broken wheel and trying to make a new version of that broken wheel is going to do it. And that's what really frustrates me because we're in the IT area. We see from everything from consumer products all the way up to Enterprise Products, the things that are just, you know, we can't get to anymore. And we have to have those global tech supply chains and enterprise IT definitely feeling that ripple effect through the whole thing. I personally had some work put on hold because they don't know what it's basically going to mean for technology and tariffs. That means I'm not working, they're not working, and nobody's winning off of this situation. So with companies like Apple expecting to pay that $1 billion in the quarter, it the cost increases are just accounting. Clients, they're pressure points, not just counter accounting lines, they're pressure points across procurement, across infrastructure rollouts and end user pricing. And that means potential delays, as you said, in refresh cycles, higher costs, everything in the next iPhone is going to be what, 20 to 30% more. And when Apple tried to move to a different country to relieve themselves on a different taxes, we got dinged for that as well. And building let's let's talk for a second about building infrastructure in the United States to alleviate this whole thing because you just can't pop up a, you know, an Amazon. Store in the middle of Utah or something like that and expect production to happen with within under 12 months because building a plant like that is more more than just breaking ground and building the plant itself permits environmental surveys, government getting in the way to try and figure out where their cuts going to come in. And more than that, that's going to take more than 12 months alone. So if we were to build a plant because we tried this. Foxconn King was gonna come to Wisconsin. And do all this and they went through so much red tape. They, they first started in Ohio, they went through red tape, they moved to Wisconsin. And then we ended up not getting Foxconn at all in the United States. So that it, it just doesn't make sense. I have it set up for failure. And that's what really frustrates me. Adding in things like AI stressing infrastructure, that's the only option is to pay. And that means thinning staff and sending these bumps to the client. And that's what's really. I can see it. I don't understand why other people cannot, but I digress. I think you know the the. The plan is, is a long term plan that involves pain at the moment and I think that pain is is kind of takes some time to pass. Hopefully some more of the trade deals and negotiations go through and says we'll see some reductions in these tariffs over time. But that's really comes down to the strength of those negotiations, the ability of those negotiating change.
