Trump already introduced a 25% levy on steel imports last month and has now slapped tariffs on just about every country, including 20% price increase on all US goods entering EU.
China, meanwhile, has been hit with a 34% levy — a number that could rise to as high as 50% if China fails to lift retaliatory duties on US exports.
Scott Bickley, an advisory fellow at the Info-Tech Research Group, said the new tariffs will hamper all data centre operators, ranging from mega-vendors and hyperscalers to enterprise firms.
“With significant companies in China, Taiwan, South Korea, and the EU facing tariffs, the supply chain will experience stress points throughout the process,” Bickley said.
The tariffs, which Trump referred to as "medicine," have already had a significant impact on steel imports at a time when the supply chain is already struggling.
The conflict in Ukraine has had a significant impact on the Azovstal steel plant, forcing firms to source steel from China and Sweden. Meanwhile, Saudi Arabia is purchasing 20% of the world's entire steel supply to support the construction of its planned ‘one line’ city, Neom.
Bickley told Capacity that data centre construction costs could increase by approximately 16% as a result of the tariffs.
Along with steel, the new tariffs will significantly impact hardware, as China remains a major hub for tech manufacturing.
Meanwhile, Taiwan, where TSMC manufactures semiconductors for companies like Nvidia, was hit with tariffs of 32% — a situation compounding Trump's earlier threats to introduce tariffs potentially as high as 100% on exports of semiconductors from Southeast Asia.
Lee Poh Seng, a Professor of Mechanical Engineering at the National University of Singapore, said the tariffs, when combined with the Biden administration's restrictions on semiconductor exports, means the region faces growing pressure.
“Malaysia, shipping nearly 20% of US chip imports, could be hit hard by proposed 25%+ tariffs on semiconductors,” Lee said. “Ultimately, Trump’s tariffs may reconfigure global supply chains, with Southeast Asia at a crossroads—vulnerable to policy shocks, yet well-positioned if it doubles down on energy, talent, and digital readiness.”
The tariffs could cause IT hardware costs to soar by around 25%, Bickley said. He warned that companies not planning to buy or lock in fixed prices potentially face severe consequences.
“Many will need to reconfigure their budgets, downscale their expansion plans, or find additional funding to keep their projects on track,” the advisory fellow said.
Trump doesn’t appear to be backing down on his tariff plan despite it causing the world’s stock markets to plummet.
All of the US’s three major stock indexes tanked in the wake of Trump’s tariff announcement, while the S&P 500 dropped to its lowest since the start of the pandemic.
It’s been dubbed one of the biggest shocks to the global financial system since the Second World War, but the US President is doubling down, with plans to introduce higher custom tariffs on what he described as countries he views as “worst offenders” set to come into force this week.
The widely ridiculed decision to impose tariffs on the Heard and McDonald Islands, which are inhabited only by seals and penguins, was defended by Commerce Secretary Howard Lutnick, who claimed they could have been exploited as a loophole.
“Sometimes you have to take medicine to fix something,” the President told journalists aboard Air Force One over the weekend, contending his tariff plan would make the US “wealthy like never before”.
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