Trade Under Trump | How New Tariffs Impact Your Global Tech Shipments

TecEx Webinar | 2025

Tariffs 101 & Timeline

Cassandra: First things first, and the main reason why we’re here today.

Let’s begin with an understanding of something we’ve been hearing a lot about in 2025, and that’s tariffs. So what are tariffs exactly? A tariff is a kind of duty, specifically a tax that is imposed by a government on imported goods. It’s often confused with general import taxes, but there are key differences.

Import taxes or mandatory costs are added onto imported products, services, or wealth coming into a country; it is usually charged as a standard percentage rate, like 21% into the Netherlands. An import tax serves as a revenue stream to uphold the local government. 

Then we have duties. Duties are a type of tax added to imported products. It is often fixed which has also been determined by international trade negotiations. Duties are calculated based on the value of the product and aim to encourage local, or in our particular case, USA-based manufacturing. 

Then, finally, tariffs. Tariffs are proposed more strategically, and it is there to protect local industries or to retaliate against foreign trade policies and to raise revenue for the importing country. They are a tax added to imports that also controls how freely a product can be imported into the country. Tariffs are triggered by the cargo being imported and are determined either by the HTS code, which classifies the commodity you are importing, or the certificates of origin where your shipments and cargo are coming from. Tariffs encourage the consumption of domestic products by disincentivizing the imports of foreign products by increasing the price of those imports. 

Now, the other big worry is at the end of the day, who fits the bill for these import tariffs and import taxes? Typically it will be the importer that will be paying for the import tariffs and import duties, meaning that this cost is often passed on to the final customer or the client.

So let’s say we have a USA-based IT distributor who’s importing AI-enabled servers from Taiwan. If these goods are hit with a 25% tariff. The importer in this case, the USA distributor, will pay that upfront to customs upon import, and then that cost might be passed onto the end user or bundled into the final product cost at the end.

But either way, it impacts margins and pricing downstream. So it’s very important to consider these things and how they will impact the customer is yet to be seen. So we had a question submitted from Simon in his registration for the webinar. Simon, thank you so much for this. We’re gonna have a look at what has changed in the past six months and run through the current tariff climate.

They are meant to level the playing field, but can quickly trigger fast-moving and unpredictable escalation cycles between two countries, which is where we find ourselves now, and what we’re looking to shed light on in this discussion. And with this, I would like to now bring in Andrew. So, Andrew, you have seen the tariff consequences of import noncompliance firsthand.

Can you please share an example of what happens when companies underestimate tariff risks?

Real-World Tariff Risk & Compliance Concepts

Andrew: Absolutely. One case that really sticks with me is I had a client who sourced a large amount of equipment from China and was importing to the United States. Let’s talk a million dollars as a round figure in terms of value for this particular project.

They thought they could use their entity in the United States as the importer of record, and by doing this, they wouldn’t be impacted by the import tariffs because they were a US company. Well, that was not the case. The gear gets to customs, and all of a sudden, and this was at the height of the trade war, let’s call it, between the United States and China, they had to foot the bill for an increase of 145% on their import tariffs.

So simply put, this huge financial bill simply adds no additional value to this particular project. It adds a huge amount of money to the state in terms of the tax that they collect, but it’s a pricing element that you simply cannot avoid the equipment in customs. And this is an additional cost that needed to be paid, and it wasn’t planned for whatsoever.

So in this particular example, we could have saved this client hundreds of thousands of dollars simply by just advising on when to ship or wait, et cetera.

So it really was a difficult one for them to digest.

Cassandra: Yeah, absolutely. And the tariff as high as 145% which drastically increases the prices downstream

Andrew: Hugely.

Cassandra: Then we had a second registration question from Candace. Thank you for this, Candace. She asked, How do tariffs impact resellers that import hardware from various OEM partners?

Andrew: This is also a big one. If you’re a VAR or reseller and you’re sourcing equipment from multiple OEMs, manufacturers, you need to track the country of origin per item. Now, why this becomes important is that each product may fall under a different tariff code. Uh, it may have different exemptions based on where it is manufactured. Different countries around the world have different trade relations with the United States, and ultimately, that is where the big impact comes from. This means your customs documents need to be flawless. Otherwise, you can expect an increase, as we’ve mentioned in tariffs, your taxes, audit risks, and unexpected duty charges.

But I think the bigger question that we are also finding, or being posed with, is about a whole bunch of supply chains from various industries around the world being returned to the United States. And that’s ultimately what President Trump is looking to do is bring manufacturing back to the United States.

So I guess the question is, can OEMs afford to make these manufacturing location changes and ultimately their products that they then produce, which go to VARs and resellers, and how can they take advantage of that? Well, it’s a fairly complicated question because it’s, we’re really looking at macroeconomics now in an ever-changing, you know, long-term scenario. It’s a lot of money to move manufacturing lines from one country to another. It’s also, you’ve got to look at labor costs, electricity costs, all these other scenarios. So. It really does take a lot of time and a lot of capital expenditure. Also, with that short-term understanding of in a couple of years, there will be a new president in the United States that has a different agenda, and that’s what you’ve ultimately got to weigh up.

So even with a short-term gain of potentially saying, ‘we’re going to move to the United States to get these, these tariff breaks and ultimately sell our products to our VAR resellers clients at a cheaper rate’. There’s this uncertainty that still sits in terms of these tariffs that are implemented, um, and it makes it difficult to make a business decision.

So this is ultimately where we fit in as well to assist with understanding these different import taxes and duties, and we’re the specialists looking at this detail every single day. So can best advise based on this OEM made in this country and how the products impact you.

Cassandra: Absolutely. And we’re actually just looking at a hair-fine trigger of when these businesses, these importers and exporters need to make those decisions on where they move their supply chains and when. So, definitely an interesting one we are looking at. But specifically within our industry. Andrew, why is it that IT hardware is especially vulnerable to the current tariff climate?

Andrew: Also brilliant question. We find that IT gear is a prime target because it’s a high-value category. You can imagine if you import one server compared to one orange, you generate a lot more in in tax for the state in terms of that comparison.

But it’s also a multiplier in the economy due to its technological advancement – if you can obviously speed things up in processing, manufacturing, cybersecurity, data enhancement, and enrichment, it really allows you to be more productive and make things more accurate. You can see if we go from accounting, finance, all the way through to military, um, applications, accuracy is huge.

And that brings me to the second point, really, which is that IT hardware is dual-use. Meaning that it can be used for day-to-day civilian purposes, but there’s this huge element. We forget that it can also be used for military purposes. And I think we’re seeing, especially at the moment with the heightened tensions around the world, tech actually plays a huge role in defense, and governments are very, very aware of this.

So they want to control the supply of the equipment for their own advancement, for their own advantage. But at the same time, it’s a huge income source for them as a company or as a country. If we look at companies who are obviously more granular and it’s not as macroeconomically focused, if you look at most devices, such as service storages, these really are impacted by your components. And if you’ve got components that make up a product that come from three or four different countries, all of this can really play into making sure your documentation is correct, and we’ve touched on how it can really be negative if this isn’t correct, but things like country of origins and HS codes, which Melissa will touch on in a few minutes, that needs to really be accurate.

And it also brings us to a few sorts of key terms that we need to clarify just so that everybody understands once again, what are the risks of making sure that these documents are correct, and a peek behind the window of seeing if they’re not done correctly. 

But once again, it really just comes down to, and I think this is the key takeaway of this whole section, is documentation is everything. And for a long period of time, if you don’t have a clear paper trail showing, what happened, where everything happened, customs will default to penalties, fines, et cetera.

So you need to have that documentation for a period of five years after that. So we do as a standard take care of that, but it’s important to know.

HS Codes and Artificial Intelligence

Cassandra: Thank you so much for that, Andrew. Very insightful. I think just hearing this, there is so much risk if a business does not have the information when they need the information to make the right decisions on their imports. And it’s so much more than just a points of data that you declare to customs, the ramifications are far-reaching. Thank you for detailing that out. We’re gonna move on to Melissa. Melissa, Andrew just mentioned that you’ll be discussing a little bit more around the HS codes, within your field in AI tech.

Specifically related to that, can you please explain HS codes to us?

Melissa: Of course, Cass. So HS codes or harmonized system codes are a global standard to classify products in international trade. So every single product crossing a border needs to have one. And this is what determines what duties, or in this case, I guess what tariffs apply to these.

In AI tech classification is especially important because products can range from generic computing hardware to highly, highly specialized AI chips, and the exact HS code affects not only just the tariffs, but the customs clearance speed and compliance risk. So as you can see, this really impacts a lot on a shipment when a client is importing something into a foreign region.

So, for example, AI servers may fall under a different HS code than general-purpose servers. This impacts duty rates significantly. So, where this can go wrong is really where there’s a misclassification. It can mean that overpaying of duties or taxes can happen when it clears customs, or there’s a penalty for underpaying duties. This can really have a massive financial impact on the shipments.

Cassandra: With the ramifications being so far-reaching, who is responsible for accurately clearing the HS code to customs? 

Melissa: This actually lies with the importer of record themselves. So at TecEx, we have an entire compliance and trade department that looks at all these HS codes and accurately allocates them to these types of products.

So we ensure that the codes are signed according to the specific use case and purpose of the equipment. And if you just think about the impact of this type of classification, it really minimizes the import risk for our clients in this type of hardware.

Cassandra: Specifically looking at AI goods, how are AI goods classified for tariffs?

Melissa: Okay, so AI goods are typically classified based on their primary function and their composition. So, for example, a generic general-purpose server that happens to run AI software, perhaps might still fall under a standard server HS code, but a specialized AI inference chip or a neutral network, uh, accelerator would generally actually be classified under a completely different code that reflects its specific tech category, often one that has a higher duty rate due to its sensitivity and value.

So what complicates this is how fast tech is evolving. Customs authorities just cannot keep up. They often lag behind in updating classifications, which means that a lot of exporters need expert advice as to how to classify this type of equipment and make sure that it’s completely accurate and compliant before importing.

Otherwise, they really risk underpayment of duties, like I mentioned, fines. Or even worse, this could be seized by customs. So there’s a lot that’s going on here, and maybe what I can take you through is a practical example of a mission-critical project that I was involved in, it was super, super exciting.

So for context into this whole world of AI imports. The markets have rapidly moved toward the Nordic regions with abundant space and cost-effective sustainability. They’re really taking center stage in all AI expansion globally, and this means we’re working with multiple foreign customer regimes, so things can get pretty complicated.

Cassandra: Thank you so much, Mel. I’m even just putting myself in our clients’ shoes as AI and tech companies.

With so many intricacies happening all at once. There’s country specific elements, there’s product product-specific elements, there’s cost elements, there is the macro-micro economy. There’s so much going on. It would be amazing just to have one point of contact that could deal with all of that for you, and you just need to deal with making your sales.

Melissa: Well, Cass, I mean, you could honestly just call me anytime. We’ve got this in-house.

Cassandra: I’m gonna be calling you sooner than later. Thank you so much, Mel. It’s really, actually just a perfect example of how and why imports and export regulations are more than just paperwork through what makes and breaks, like you say, mission-critical shipments. Which also leads us to a question that many of our clients have asked us, uh, particularly earlier this year.

What happened to the AI Diffusion Act? It rose, stirred up a lot of conversation, and then suddenly it disappeared.

AI Diffusion Act

Melissa: So the AI Diffusion Act was a serious topic of conversation for the first few months of this year. Everyone wanted to know about it, what was happening, how it was being regulated, what was happening next, and, honestly, the whole aim of it was to regulate AI tech exports and imports globally. So it would’ve had a massive impact on a lot of our clients’ businesses. However, it was quietly dropped before enactment, meaning there were no new tariffs that were introduced for AI imports or AI products. So we haven’t had any of these introduced. We haven’t been affected by these reciprocal tariffs just yet.

But this really doesn’t mean that we should become complacent. And our trade compliance team, as I mentioned earlier, is constantly looking into these types of things and remaining on top of it so that our clients are always in the know, because other sectors or regions might apply restrictions at any time, and this can happen at the last minute, so we really need to stay on top of it.

Cassandra: Yeah, exactly. As you say, there’s no use in becoming complacent ’cause you don’t know how long this little reprieve will actually last.

Q&A

All right, let’s move on to our Q&A. We have a few great questions coming in.

Thank you to those who submitted. The first one came in from Mace, um, who asked about the food and beverage tariffs. Now, while TecEx, of course, specializes within the tech and AI space, she asked about the tariff changes within the sector. And I think it’s worth briefly mentioning. 

So there is no specific tariff that targets the imports of food and beverages.

But there is the universal 10% tariff on nearly all imports. And this absolutely applies to the imports of these goods. But alongside food and drink, uh, the packaging costs are rising too. Tariffs on steel and aluminum that are used in making the cans and tins, and food-safe materials, are also becoming more expensive.

So, ultimately, Mace, the reality is for food, just like tech, your tariff exposure is getting harder to avoid and getting harder to absorb. Thank you so much for that question. Uh, the next question that came in, I’m gonna ask Mel to address this one first, then Andrew.

We were asked, what are some of the unexpected compliance blockers businesses might face when rerouting to avoid tariffs?

Melissa: Sure, Cass. So this one is definitely quite topical and comes up quite often. And I guess there are a couple that I would like to refer to. The first one that comes to mind is probably unclear or ever-changing classification rules. As I mentioned earlier, classification is everything. And these are changing quite often with the ever-changing hardware.

So, that’s definitely one that could be a massive compliance blocker. Another could be changes in export controls. As I mentioned, the AI Diffusion Act was a possibility, and it might be enacted elsewhere in the world. So this is definitely something that we need to look out for. And then I guess also the sudden restrictions on chip technology exports.

This is something that I think every single region is trying to regulate. So a sudden change on restrictions could mean a last-minute hold up or even require rework of documentation, and this could have a significant time impact, a significant financial impact on shipments. And something is that’s really to be looked out for.

Andrew: I think to follow on from what Melissa said, a lot of that pulls through also to standard IT hardware. We look at blockers, especially when we are rerouting; it can be incomplete origin certificates, a lack of proper documentation, such as licenses, testing certificates that also need to match the IT hardware itself.

All sudden changes in trade agreements, and this can simply be on duty rates or compliance requirements. All of this can lead to delays in customs, extended inspections, or the worst-case scenario, confiscation. So, really staying up to date with what is most recent and having reliable partners that you know can rely on from a compliance point is really going to be the winning record at the end of the day.

In Conclusion

Final few notes here at TecEx, we do offer our TecEx Tariff Tracker.

We also provide HS code consulting and tax quotes to help you make accurate and informed business decisions, particularly on when to pull the trigger on your shipments. We provide this as a holistic solution to help you stay compliant and also optimize your costs. Now, after this, we will be sending you an email with the webinar recording and all the tickets, resources that we referred to today.

So please just also remember to stick around and fill out the survey that will pop up on your browser. We’d love for minutes of your time just to hear your thoughts so we can improve our webinars going forward.

And at TecEx, import and export experts are only an email away. If you have your proposed shipment bill of materials already detailed out, we can provide import assistance and guidance to ensure that successful importing and compliance with your HS code, which classifies your commodity, and COO declaration is accurate. Reach out to your CSM or Shipping Manager with any questions.