Tech stocks dropped 3.7 percent on Monday, as President Trump indicated that he would not back down from his plans to implement import taxes on products from Canada, Mexico and China. They began to climb back up Tuesday after an initial dip.
The U.S. imposed 25 percent tariffs against both Canada and Mexico on Tuesday, as well as an additional 10 percent tariff against China. Beijing faced an initial 10 percent tariff last month, while both Canada and Mexico were able to secure a one-month delay.
While markets rebounded Wednesday after Trump announced he would reel in some of his recent tariffs, the tech sector is still facing several threats.
The tariffs throw a wrench in the flow of consumer electronics, the vast majority of which are made in China, said Chris Rogers, head of supply chain research at S&P Global Market Intelligence. Mexico is also a key supplier of consumer electronics for the U.S.
“You’re not going to be able overnight, if you’re making your electronics in China, to go buy them somewhere else or go make them somewhere else,” Rogers told The Hill. “That’s going to take quite a long time to do.”
As all three countries prepare to enact retaliatory tariffs, U.S. exports in the tech sector are also likely to take a hit.
Canada plans to respond with 25 percent tariffs, while Mexico said it would respond with retaliatory tariffs by Sunday.
China enacted tariffs between 10 and 15 percent on a range of American agricultural products. While Beijing has thus far not taken aim at the tech sector with retaliatory tariffs, it has targeted U.S. tech firms, like Google, with antitrust investigations.
Read more of what experts are saying about the risks for global supply chains in a full report at TheHill.com tomorrow morning.
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