April 22, 2025: Impact on PCs

The global PC manufacturing landscape remains predominantly centered in China, posing significant challenges for the industry in mitigating tariff risks in the near term. Despite recent US exemptions removing tariffs on laptops, uncertainty persists as the Trump administration is planning to impose new duties on semiconductors and other tech products within the next quarter. We expect laptop ODMs (original design manufacturers) and EMS (electronics manufacturing services) will continue to accelerate the shifting of manufacturing from China to other countries, such as Vietnam, India and Mexico, despite these countries also facing different levels of tariffs. We believe the top priority for PC vendors is to shift manufacturing of all products destined for the US market to non-China manufacturing lines.

Overall, US tariff policies have caused uncertainty in the PC industry in 2025, with manufacturers facing escalating costs and potential supply and demand contraction. While temporary exemptions on certain electronic devices like smartphones and laptops have provided temporary relief, the expected US tariffs on semiconductors threaten to disrupt supply chains and dampen demand and investment in AI infrastructure and devices.

Associate Director David Naranjo said, “The US market remains the most important market for AI PCs to demonstrate their capabilities and the best market to sell advanced AI-enabled devices. High tariffs, or tariff policy uncertainties, will likely discourage consumers or enterprises from buying new devices with additional costs, which in turn will suppress growth and increase in penetration. The lingering global economic uncertainty will also pose a downside risk to our forecast of a mid-single-digit YoY shipment growth of the PC market in 2025.”

April 17, 2025: China’s Smartphone Production Share May Drop Amid Tariff Pressures – India Emerges as Key Alternative

Counterpoint Research, citing discussions with global companies, estimates that China’s dominance in smartphone manufacturing could decline significantly if tariff tensions persist. China’s share of global smartphone production is projected to drop from 64% in 2024 to 55% by 2026 — a sharp fall driven by companies accelerating diversification strategies. India is expected to emerge as a key beneficiary, as smartphone and PC assembly lines increasingly explore alternative locations outside China.

April 15, 2025 : US Tightens Restrictions on NVIDIA's China Sales

The latest move by the U.S. government to restrict NVIDIA’s export of advanced AI chips to China is not entirely unexpected. NVIDIA’s chip trade has long been in the crosshairs of Washington, but recent developments — particularly claims by Chinese firms like Deepseek that they can achieve high-performance AI using less advanced chips — have triggered alarm bells. This has led to further tightening, with broader implications for the ongoing U.S.-China trade tensions.

This decision is likely to accelerate China’s push to develop more advanced domestic semiconductor capabilities, a key national priority. While there will be short-term pain for NVIDIA and other chipmakers that sell into China, NVIDIA remains in a strong position globally, with robust demand elsewhere and no major signs of a slowdown.

The restrictions could eventually expand to cover lower-end chips as well, potentially prompting broader industry lobbying.

Featured Analyst Take:

Marc Einstein, Research Director, Counterpoint Research:
"While this is certainly a lot of money, this is something Nvidia can bear," he said.

"But as we have seen in the last few days and weeks, this may largely be a negotiating tactic. I wouldn't be surprised to see some exemptions or changes made to tariff policy in the near future, given this not only impacts Nvidia but the entire US semiconductor ecosystem," Mr Einstein added.

April 14, 2025 : Trump says he will announce his tariff plans on imported computer chips this week

U.S. Government Tightens Stance on Electronics, Semiconductors

Amid ongoing tariff revisions, Commerce Secretary Lutnick's recent remarks suggest that sectoral tariffs on electronics and semiconductors could be next. While tech giants continue to push back, the government appears undecided — balancing pressure to go onshore with risks of skyrocketing consumer prices.

The challenge is that bringing electronics manufacturing back to the U.S. is far from straightforward. As seen in India’s decade-long Make in India journey — and China's even longer one — building a competitive electronics ecosystem takes time, investment, and a skilled workforce. For the U.S., it remains more a long-term ambition than a near-term solution.

Meanwhile, countries like India stand to benefit. As companies look to reduce reliance on China, India is emerging as a viable alternative destination for electronics and semiconductor manufacturing in the near to mid-term.

Featured Analyst Take:

Marc Einstein, Research Director, Counterpoint Research: "The reality is [semiconductor fabrication plants] take years and tens of billions of dollars to build and the administration knows that,”

“What I think is ultimately going on is the current administration is looking for a deal and they have said as much.” Einstein adds that would have a "strong and quick negative impact" on large US technology firms like Apple, Nvidia and Microsoft. He cites national security and strong demand as major reasons for the US wanting to push China out of its chip market.

"It's unsurprising the US is trying to use its clout to get a piece of the pie and to circumvent China and possibly other countries from gaining dominance in the space."

Research Vice President Neil Shah: “The next tariff strategy for the government would be super crucial and critical considering bringing electronics manufacturing back to USA is not going to be a cakewalk and will take years and even decades.”

April 11, 2025: Trump exempts smartphones and computers from new tariffs

April 10, 2025: Trump announces a 90-day suspension of reciprocal tariffs, excluding China, while increasing tariffs on China to 125%

Hardware companies heavily dependent on China are among the most exposed. As they pass on costs to CSPs and enterprise customers, this could trigger delays or changes in enterprise purchasing decisions. AI software providers may also see indirect effects — delayed demand for hardware upgrades could slow down adoption of their offerings, particularly those built for the latest AI models.

Some enterprises may fast-track purchases in the short term to hedge against higher costs, while others might delay investments or move clusters outside the U.S. to manage risk. However, delays could jeopardize planned technology roadmaps and weaken competitiveness versus global peers continuing to invest aggressively.

Reshoring of semiconductor manufacturing to the U.S. is unlikely to provide a quick fix. The lack of skilled labor and high production costs present significant challenges. Even over time, these factors could lead to higher semiconductor prices and, by extension, increase costs for end products such as AI PCs and servers.

Research Vice President Neil Shah said “Reshoring is going to be important, but it’s the question of where and when."

April 9, 2025: US tariffs surge to 104%, China retaliates with 84% tariffs

Smartphone OEMs Can Tackle Trump Tariffs With Base Change

US President Donald Trump announced reciprocal tariffs for a broad list of countries on April 2. As many as 57 countries will be affected by this announcement, including the key manufacturing hubs for smartphone brands dominating the US market, like Apple, Samsung, Motorola, Google and longtail China-based suppliers for low-end US prepaid markets.

Vietnam will face a 46% tariff on its exports to the US, which will hit Samsung since the brand produces more than 60% of its smartphones in the country. Other brands such as Apple, Moto, Google and longtail brands are highly dependent on production in China, which will now be subject to a total US tariff of 104%, a sharp escalation from previous levels and the highest among all affected countries under the new policy. Therefore, all the major brands are at risk of being hit by this tariff increase and are starting to look for solutions to somehow minimize the negative impact.

These new tariffs will directly affect the cost structures of smartphones sold in the US, which could result in higher retail prices and reduced consumer demand. The impact will vary across brands, depending on how many units are produced and in which country. Our initial thoughts are as follows:

What can Apple do?

• Apple has maintained higher margins than other brands, creating flexibility to absorb some of the tariff costs. The company is likely to be the least affected in the short term as it can avoid passing on tariffs to end users if it decides to do so. However, increased inflation and souring consumer sentiment can still lead to weakening demand.

• India faces a tariff of 26%, which is lower than for China and Vietnam. Since India accounted for 20% of the iPhone supply meant for the US in 2024, it could be a big beneficiary of any move to shift iPhone production meant for the US to a relatively cheaper destination.

• However, increasing capacity in India depends on the following factors:

  • Apple’s intent and appetite to diversify swiftly

  • Technological readiness of Indian EMS partners

  • Capex investments and appetite

  • Support from ongoing government schemes

  • India’s prowess at the US’ negotiating table to become a ‘favorable’ production destination

Commenting on this potential scenario, Counterpoint’s Research Vice President Neil Shah said, “India makes the most sense for now, followed by Brazil, though increasing capacity in both will take time. But Apple and everyone else have entered a twilight zone where it is impossible to anticipate tariffs one month or one year down the road, especially now with the China tariff jumping to 104%.”

Shah added, “For Apple and others, there is a list of things that need to fall into place for India to be a better alternative than before – technological readiness of domestic EMS partners, capex appetite, government support and India’s ability to deal with the US at the negotiating table on tariffs. If the country can do these things, it can cement itself as a more favorable production destination.”

How are Samsung and others positioned?

• Even as Samsung is less dependent on China in terms of production, which is mostly for its mid-tier phones with Chinese ODM partners, it is in a strong position to address the concerns related to the new tariffs fairly quickly than others.

Commenting on this potential scenario, Counterpoint’s Research Director Tarun Pathak said, “With significant capacity in India, Samsung can shift production away from Vietnam more quickly than others, helping it offset the impact of the new 46% tariff on Vietnam-made phones. Samsung has two factories in India and one of them has excess capacity which can be scaled up. Further, if the South Korean government successfully negotiates with the US, some exports of premium models from Samsung’s South Korean factories will also see an uplift.”

• Motorola, which too relies heavily on Chinese ODMs and international EMS partners, is also in a relatively better position as it could benefit from shifting more production to Brazil (which has attracted the lowest tariff at 10% and is also one of its biggest markets), and India as well, leveraging Indian EMS partners which are likely to be the key beneficiaries.

Commenting on this potential scenario, Counterpoint’s Research Director Jeff Fieldhack said, “While the imposition of these high tariffs is sudden, OEMs have likely been anticipating it. However, fundamental solutions such as relocating production bases require significant investment and time, and are unlikely to provide relief in the short term, while possible long-term solutions could also face tariffs.”

Fieldhack added, “OEMs which are seeing healthy growth, like Google with its Pixel phones, will likely plan to shift manufacturing to alternative destinations such as India depending on their ODM/EMS partners’ capabilities and capacities. Brands that have been manufacturing for US carriers and prepaid markets will be affected the most due to their strong dependence on the Chinese ecosystem, which opens up new opportunities for existing brands to expand and newer brands to enter.”

April 8, 2025: Automakers React to US Tariffs: Price Hikes, Production Shifts

Automakers are scrambling to respond to the tariffs imposed by the Trump administration. However, there are further dominoes to fall, as tariff impacts on automotive parts will only become visible in early May. For now we have compiled the initial responses by some of the biggest automakers:

• BMW will absorb the costs arising from the US tariffs till at least May 1, 2025, but may have to reassess the decision after this date.

• Ferrari will maintain prices for the Ferrari 296, SF290 and Roma models and increase prices for its other models by up to 10%.

• Ford, under the ‘From America, For America’ program, has extended its employee pricing to customers till June 2, 2025. However, the Ford Expedition and Lincoln Navigator models, performance models like the Raptor and specialty models like the Mustang and Bronco are not covered by the program.

• General Motors, which currently imports 45% of the vehicles it sells in the US, will boost production of light-duty trucks in the country by adding several hundred temporary workers at its Fort Wyne and Indiana assembly plants.

• Hyundai Motor Group, whichowns Hyundai, Kia and Genesis brands, will maintain prices for the next two months. Also, before these tariffs were announced, it pledged to invest $21 billion to boost US production capability, increase localization, reinforce the supply chain, and invest in charging infrastructure. In another move, this time linked to cost savings, Hyundai said it would no longer offer free routine maintenance perk that covered drivers for three years or 36,000 miles of ownership.

• Mazda, which currently only manufactures its CX-50 model in the US in partnership with Toyota at the Huntsville, Alabama, plant, will move to reduce the impact but said it was not in a position to absorb all the tariff costs. After witnessing record sales in 2024 and a great start to 2025, Mazda has been hit hard by the tariffs as it imports over 80% of its vehicles sold in the US.

• Mercedes-Benz claims it was misquoted that it would stop the sale of entry-level models in the US. In fact, it could consider shifting the production of another model to the US. On April 7, Mercedes-Benz said it would not raise prices on 2025 model-year vehicles.

• Nissan has stopped taking orders for its Mexican-built Infiniti brand vehicles QX50 and QX55. It has also reversed a previous plan to cut output at its Tennessee plant that manufactures Rogue SUVs. Nissan says, in the short term, it has ample inventory at its US dealerships that is unaffected by new tariffs. On April 8, Nissan announced price reductions for its two most popular models the Rogue and Pathfinder SUVs under the “Get the Car You Want Tariff-Free” campaign.

• Toyota plans to maintain its current prices and may meet the tariff impact through cost-cutting and improved efficiencies. It has informed major parts suppliers from Mexico and Canada that it will help them with rising costs associated with the tariffs to maintain the continuity of current operations.

• Honda will not raise prices and adopt a wait-and-watch approach. It has also decided to produce the next-generation Civic hybrid in Indiana instead of Mexico from 2028.

• Jaguar Land Rover will pause shipments of vehicles to the US to address the new trading terms and develop a mid-to-long-term plan. The US is a very important market for JLR, contributing to a fifth of its total sales in the last financial year.

• Lamborghini says its approach to the tariffs will be different, with a trade-off possible between volumes and pricing. It is working on different scenarios and will come up with a response in the next few days.

• Porsche imports all of its cars sold in the US, which contributed over 76,000 vehicles to its total sales in 2024, and will be among the most negatively impacted by the tariffs.

• Stellantis, the maker of the Jeep Dodge, RAM trucks and Chrysler vehicles, has announced a temporary halt in production at its five US facilities, two assembly plants in Mexico and one assembly plant in Canada while temporarily laying off 900 workers. Stellantis also reportedly announced it would help suppliers offset the cost of tariffs on a case-by-case and monthly basis.

• Subaru, which imports nearly half of its vehicles sold in the US, has warned its dealers that it cannot guarantee current prices and that they are subject to change.

• Vinfast, which currently produces all its cars in Vietnam and imports them to the US, will see a significant negative impact on its sales from the import tariffs.

• Volkswagen will introduce an “import fee” for the vehicles to factor in the 25% tariff. Additionally, the company has informed its retailers that it is temporarily halting shipments of vehicles of Volkswagen and Audi brands from Mexico and Europe. It has said it will provide dealerships with more clarity on pricing strategies in mid-April.

• Volvo will boost car production at its US plant in South Carolina, including for additional models. Currently, Volvo makes the EX90 and Polestar 3 models in the US.

4^th April, 2025: China’s plan to retaliate with tariffs of its own

Bigger Picture: Retaliation and Recession Risks

When we published this First Take we stated our expectation that China would hit back. We didn’t have to wait long as less than 24 hours later, China announced it will apply 34% tariffs on all goods imported from the US, starting from April 10th. In addition it is adding 27 US firms to its lists that restrict economic activity as well as implementing export controls on seven types of rare earth minerals.

China had upped imports of some products such as soy meal and petroleum during Trump’s first term. But it can likely find substitutes for these products, so applying tariffs is unlikely to significantly impact its own industries. As Senior Analyst, Yang Wang points out, “The products China really wants to buy, such as Nvidia chips, semis equipment etc., the US has already prevented it from buying, even before this new round of tariffs. So, China is likely daring the US to go even further with its own tariffs to hurt domestic companies and consumers even more.”

But as Research Director, Bob O’Brien says, there are companies that will be hurt by China’s tariff imposition, “Intel, which is already struggling, will likely be hard hit as PC production is concentrated in China as well as other markets affected by Trump’s tariffs. In response, PC makers may shift more SKUs to AMD and Qualcomm chips that are not manufactured in the US. Applied Materials and LAM Research may also feel the squeeze from China’s additional tariffs.”

Leaders of the UK, Europe and other countries will spend the next few days talking together about how to respond to Trump’s new tariffs. The plummeting stock markets are indicative of the economic stress and uncertainty, so we expect they will act quickly.

On the likely countermeasures, Research Director, Tarun Pathak says, “We expect three broad categories of response by nations: 1. Retaliatory tariffs, such as those imposed by China, 2. Support for domestic industries that are hardest hit, such as the $2.6 billion in industry support by Taiwan’s government, and 3. Negotiation, as countries seek to lower the burden of Trump’s tariffs.

April 3, 2025: Trump Administration's Tariff Announcement: Consumer Price Hikes, Supply Chain Shifts and Economic Uncertainty

The Trump administration has announced a sweeping 10% tariff on most key trading partners, effective April 9, 2025. Automotive imports face an even steeper hit – 25% on passenger vehicles, with auto parts following suit in a month. The move is billed as a strategy to level the playing field, reduce trade deficits, and bring jobs back home. But will it work? Will it set off a chain reaction of economic pain? Is it about bringing people to the negotiation table? Counterpoint analysts share their views:

Easy Economics: Higher Prices, Lower Demand

If the tariffs are implemented what’s certain is the hit to consumer wallets. Higher import duties will raise prices across key sectors, from consumer electronics to autos. Companies will pass on costs to US buyers, squeezing household budgets and cooling demand. The obvious risk is a slowdown in consumption that could rip through the tech industry. Senior Analyst Yang Wang said: “It’s tough to go against the math. Higher prices equal lower demand. It’s economics 101 and I don’t think this ends well for anyone.”

Smartphones: A No-win Situation

The US doesn’t manufacture smartphones. Asia — led by China, South Korea, Taiwan, India and Vietnam — dominates the supply chain and manufacturing. Apple, Samsung, Google and other players rely on complex, deeply integrated networks all outside of the US. Moving manufacturing stateside isn’t happening overnight (or ever) without massive government subsidies and round-the-clock availability of skilled labor, and even then, prices will soar because of a lack of cost arbitrage. American consumers will feel the immediate impact of the newly tariffed smartphone prices in an already inflationary climate. VP of Research Neil Shah said: “I guess the logic is ‘make it too expensive for smartphone OEMs to produce overseas and they’ll eventually shift to the US’. But that will never happen without massive subsidies and cheaper and skilled labor. There is zero cost advantage in manufacturing in the US.”

Semiconductors: Exempt (For Now), But Not Immune

Semiconductors may have dodged direct tariffs, but the sector will be directly impacted by the turbulence. Chipmakers like Intel, AMD and Qualcomm rely on global supply chains, and any disruption in tech manufacturing will trickle down. Supply chain diversification is coming, with India positioning itself as a potential hub. But building fabs isn’t an overnight play – it’s a multi-year, multi-billion-dollar gamble with no guarantees. VP of Research Peter Richardson said: “Semiconductors are directly upstream to smartphones. The sector is second in line to feel the impact which could be a quarter away depending on where inventories are sitting now.”

Autos: Sticker Shock

With a 25% tariff on passenger vehicle imports and upcoming duties on parts, prices for new cars could jump by $8,000–$15,000. Higher costs will squeeze consumers, push buyers toward used cars, and drive up repair expenses. European, Japanese and South Korean automakers, which count the US as a key market, are caught in the crossfire. Ironically, instead of creating jobs, tariffs could cost them as manufacturers adjust to lower demand and squeezed margins. Senior Analyst Murtuza Ali said: “The new car market is looking very bearish right now as prices will rise and supply will tighten. But it will be a good time to be selling used cars.”

India Moonshot: A Potential Winner if it Plays its Cards Right

India stands at an inflection point. While the short-term impact of US tariffs on India's electronics and semiconductor industries will be minimal, long-term shifts in global trade could create opportunities. India has been aggressively pushing for semiconductor self-sufficiency, and tariffs on China and other Asian players could accelerate investment in Indian chip design, OSAT, and eventual fab construction. Companies like NVIDIA, Intel, AMD and Qualcomm are already increasing their R&D and validation operations in India, and further diversification could solidify India’s role in the global supply chain.

However, scaling up semiconductor manufacturing is easier said than done. The industry requires massive capital investment, advanced technology transfers, and a highly skilled workforce. If India can overcome these challenges, it could position itself as an alternative hub for chip assembly and manufacturing — potentially gaining from the supply chain realignment triggered by US tariffs.

On the downside, India’s electronics manufacturers could face higher costs if semiconductor tariffs are introduced later. The country must act quickly to ramp up domestic production to avoid long-term reliance on expensive imports. Research Director Tarun Pathak said: “There’s a lot of moving pieces right now but it’s possible they could be lining up for India. Already we’re seeing the beginnings of a potential long-term shift in global trade to the continent. But three things need to be there – capital, advanced technology transfer and improving skills in the workforce.”

What’s Next?

• For Consumers: Expect price hikes across the board, from iPhones to SUVs.

• For Tech and Auto Executives: Short-term turbulence is inevitable. The long game will be about staying focused on innovation. ADAS, software-defined vehicles and next-generation chips will define market leaders.

• For Policymakers: Tariffs may be a negotiating tactic, but economic sustainability is questionable. Inflationary pressures could force a rethink sooner rather than later.

These tariffs could be a short-term negotiating ploy or a long-term economic headache. Either way, the next few months will be crucial in determining whether this strategy strengthens the US economy or backfires spectacularly.

Note: This is a developing post and will be updated as the situation evolves.