- Trump’s new reciprocal tariffs on China, Vietnam and other countries will raise the price of telecom equipment, analysts said
- Ericsson and Nokia will likely have a lower exposure to tariffs, whereas OEM vendors like Dell, HPE and Supermicro will be hit harder
- Carriers will probably be forced to raise service prices
As if we didn’t have enough to worry about, the White House just unveiled new reciprocal tariffs that spell devastating news for the global economy. The impact to telecom equipment vendors is no different.
President Trump on Wednesday announced a blanket 10% tariff across all U.S. trade partners, along with higher rates for countries with which the U.S. has “the largest trade deficits.”
This includes Vietnam, China and the European Union, which would see reciprocal tariff rates of 46%, 34% and 20%, respectively. Trump previously imposed a 20% tariff on imports from China, so the latest move would bring China’s total tariff rate to a staggering 54%. The 10% tariff on all countries will take effect April 5, whereas individual reciprocal tariffs will take effect April 9.
Not to state the obvious, but it’s looking grim for the telecom supply chain.
“[Tariffs] will certainly raise the price of equipment needed for telecommunications,” said Jason Miller, professor of supply chain management at Michigan State University. The U.S. is “very reliant” on the imported goods needed for those systems to function, he told Fierce via LinkedIn.
Dell’Oro analyst Jimmy Yu agreed that the price of networking equipment “will need to increase, especially equipment that has higher hardware than software content, such as optical transport and microwave transmission products.
It’s pure economics. “Higher prices will lead to lower demand. In turn, this will reduce equipment market growth,” Yu said.
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IDC analyst Jitesh Ubrani told Fierce while it’s still too early to predict the magnitude of impact the tariffs will have, “directionally speaking, we expect things to get worse.”
Vendors over the past few years have been working on diversifying their supply chain “to reduce reliance on China” and avoid potential tariffs, he explained. But now that tariffs are hitting countries like Vietnam, India and Malaysia, efforts to diversify supply “may have been in vain, or not as effective as initially predicted.”
Who will the tariffs impact?
When Trump in February introduced the initial wave of tariffs, vendors Nokia, Ciena and HPE told us they would remain on guard to see how events unfold, but that they were well-equipped to adjust their supply chains if necessary.
In Ciena’s case, it didn’t seem worried when it reported Q1 2025 earnings. CFO James Moylan said in March the company hasn’t included any potential tariff impacts in its financial guidance, even though most of the products in Ciena’s supply chain come from Canada, Mexico, India and Thailand.
“The impact to each system vendor will vary,” Dell'Oro's Yu said, depending on whether other countries will place reciprocal tariffs and how much those tariffs slow down growth economic growth.
Ericsson and Nokia will likely have a lower exposure to the tariffs, said neXt Curve Executive Analyst Leonard Lee, as both vendors have “established local U.S. manufacturing presence and partnerships.”
However, original equipment manufacturers such as Dell, HPE and Supermicro will probably be hit the hardest, he added, as those companies assemble their products mainly in China and Taiwan.
On the wireless device side, Ubrani said Apple and Samsung both rely on countries in Asia for their supply. Further, he explained consumers in the U.S. primarily rely on financing options or trade-in offers that “mask the total cost of the phone.”
If tariffs are implemented, they could negatively impact smartphone sales either by increasing monthly costs for the consumer or “by extending the financing plans over a longer period, which in turn would elongate the smartphone refresh cycle,” Ubrani added.
Techsponential’s Avi Greengart similarly noted tariffs could impact the cost of phones as well as things like earbuds and laptops, “which are all made in China or Vietnam."
And given how broad the tariffs are, they will drive up the cost of telecom equipment and labor, “and that will force carriers to raise prices on service as well,” he said.
In short, headaches en masse are coming, coupled with revenue slumps.
“The impact on prices and resultant cost to U.S. telecom businesses will likely be sizable and will inevitably hit their bottom lines,” Lee concluded.