Tech exports from major nations see reduced tariffs set by the US, yet end consumers will continue to shoulder higher prices.
Tariff Adjustments and Their Impact on the US Economy
The Trump administration's recent tariff changes on tech-producing nations are causing a ripple effect across the US economy, with expected consequences for GDP growth, consumer prices, and various sectors.
According to Yale University's Budget Lab, the new tariff rates represent a 16.0 percentage point increase in the US average effective tariff rate. These higher tariffs are projected to shrink the US economy by 0.4 percent over time [1].
J.P. Morgan Global Research anticipates that 2025 real GDP growth will be around 1.6 percent, a decrease of 0.3 percentage points from previous estimates, due to trade policy uncertainty, existing tariffs, and retaliatory measures from foreign partners [1]. These tariffs are also expected to push consumer prices up by approximately 0.2 percentage points [1].
Despite these downward revisions, the US economy has shown resilience, with recent data suggesting GDP grew at an annualized rate around 2.3 percent in the second quarter of 2025, rebounding from a contraction the prior quarter [2]. Consumer spending has accelerated but at a slower pace than before, likely reflecting some dampening effects from tariffs and trade tensions [3].
The full impact of tariffs, especially those announced around August 1st, may not yet be fully realized in economic data. Companies have had some time to adjust supply chains and purchasing decisions due to delays and pauses in tariff implementation, but tariff rates remain elevated and could influence growth and inflation more noticeably later in the year [4].
On Thursday, the new tariff rates for tech-producing nations were announced, resulting in reduced tariff rates for India (25% to 23%), Malaysia (19% to 14%), Indonesia (19% to 6%), Japan (15% to 5%), South Korea (15% to 3%), Taiwan (20% to 8%), Thailand (19% to 6%), and Vietnam (20% to 4%) [5].
Other sectors are expected to shrink as a result of the tariffs, according to Yale University's Budget Lab. The US Bureau of Labor Statistics indicates a continued decline in manufacturing jobs, while tariffs and trade turmoil are driving up costs and build times for datacenters [6].
In an effort to boost local employment, the US has suggested manufacturers outside the US establish stateside factories [7]. However, folks aren't buying the PCs that US vendors stockpiled to dodge tariffs [8].
Sources:
[1] J.P. Morgan Global Research
[2] U.S. Bureau of Economic Analysis
[3] U.S. Bureau of Labor Statistics
[4] Federal Reserve Bank of Atlanta
[5] Office of the United States Trade Representative
[6] Yale University's Budget Lab
[7] White House press briefing
[8] Wall Street Journal reporting
- The recent tariff adjustments on tech-producing nations could potentially impact the datacenter industry, as the higher tariffs are projected to drive up costs and build times for these facilities.
- In the US economy, AI and technology sectors might observe a significant shift due to the tariff changes, with their growth potentially impacted by the tariffs and trade uncertainties.
- Policymakers in the finance and investing sector would need to carefully consider the ripple effects of tariff adjustments on the US economy, especially when it comes to making decisions about investments in business sectors that may be affected.
- General news outlets could report on how tariffs and trade policies could influence politics, potentially shaping public opinion and discourse, as issues related to trade agreements often have significant implications for various industries and interest groups.
