May 2025 Computer Manufacturer Tariff Update
As the back-and-forth on tariffs continues, with pauses and negotiations creating uncertainty, what can we expect from the biggest names in the computer industry? Here, we break down how Dell, HP, Lenovo, and Apple are responding to the situation and the strategies they’re putting in place particularly in light of their reliance on key components sourced from China.
Key Components Manufacturers Rely on China for:
1. Semiconductors & Processors – Many chips used in laptops and desktops are sourced from Chinese manufacturers or Taiwanese suppliers with Chinese production ties.
2. Flat-Panel Displays – LCD and OLED screens for laptops and monitors are often assembled in China, making them vulnerable to tariff hikes.
3. Battery Cells – Lithium-ion batteries used in laptops and tablets are primarily produced in China, affecting costs.
4. Motherboards & Circuit Boards – Many PCBs and motherboards are manufactured in China, impacting overall device pricing.
5. Cooling Systems & Fans – Essential for high-performance computing, cooling components are frequently sourced from Chinese suppliers.
Manufacturers’ Current Plans
HP is planning on addressing the tariffs by shifting 90% of its North America-focused manufacturing out of China by the end of October 2025 to avoid tariff-related costs. However, they have signaled that price increases may still be necessary as they transition their supply chain.
Lenovo, on the other hand, has stated that tariffs won't significantly impact their business, citing their global manufacturing footprint as an advantage. They believe their flexibility will allow them to maintain competitiveness and protect profits.
Dell has adjusted its pricing strategy and instead of outright price hikes, Dell is looking to cut discounts on many of its computers, effectively raising costs for consumers. Their CFO has stated that tariffs are being treated as an input cost.
It is notable that Dell’s stock has dropped 30% in the last 90 days, reflecting concerns over higher import costs and shrinking device promotions. They predict a 15-20% increase in DRAM and SSD costs in the second half of 2025.
Apple is navigating the U.S.-China tariff situation by shifting iPhone production to India to reduce reliance on China and avoid tariff-related expenses. Apple has also committed $500 billion to expand U.S. manufacturing, including a new server factory in Texas.
Apple has built up inventory to minimize short-term tariff impacts but expects a $900 million tariff-related cost increase in Q3 2025. Some Apple products (like smartphones and computers) are temporarily exempt from certain tariffs, but future changes remain uncertain.
What Next?
The 90-day pause on U.S.-China tariffs has temporarily slowed price increases, but businesses are still preparing for higher costs once the pause ends. Retailers and logistics companies are rushing shipments to take advantage of the tariff-free window, leading to port congestion and rising freight costs.
While some companies have held off on price hikes, others expect higher prices to remain due to uncertainty in trade policy. If no long-term deal is reached, tariffs could return to previous levels, forcing companies to adjust pricing accordingly.
Gray Wolf has not yet seen tariff increases implemented for any of the aforementioned suppliers, however, we have heard some threats that we believe were used as a “Call to Action” to get the deal done quicker and the increases were then paused. We continue to recommend that our customers push back on price increases during the pause phase of the tariffs as we continue to monitor them.