"Why does tech cost so much?" – The answer? Tariffs.

In January 2025, Donald Trump and his administration established new tariff policies on the importing of foreign goods into the United States. The largest tariffs were placed on imports from China, which reached a high of 145%. Other countries, such as South Korea, Japan, Taiwan, and the United Kingdom, were affected by these changes, seeing percentage increases as small as 5% and as large as 30% in taxation.

While tariffs themselves can help control the concentration and distribution of foreign goods in a country, they can have unwanted effects that directly impact both consumers and manufacturers in the technology industry. In this article, we will go into greater depth on why your newfangled iPhone, Ninja blender, or Whirlpool washing machine costs so much, as well as why this is something you should pay attention to.

In early 2025, 47th U.S. President Donald Trump placed both a 10% blanket tariff with country-specific reciprocal tariffs as a cherry on top. As mentioned earlier, these tariffs target the United Kingdom (10%), South Korea (25%), Japan (24%), Taiwan (32%), and many other countries that engage in international trade. Why these tariffs have such an effect on our technology industry is due to their contributions to our supply chain. Our technology supply chains span several continents, notably North America, Asia, and Europe. In turn, the supply chain has experienced major price increases since the implementation of our new tariff policies. Semiconductors and critical materials are usually manufactured in Asian countries.

While we may think that this is just a localized effect, this actually affects everyone globally due to the United States' dominance in the global technology supply chain. The United States has a 39% contribution percentage; however, due to its alliance with key countries such as Japan, the Netherlands, the United Kingdom, Germany, Taiwan, and South Korea, the United States has obtained a total supply chain presence of 59%. Our Asian allies are major contributors to other aspects of the supply chain as well, including the designing, fabricating, assembling, testing, and packaging of our semiconductors. The cost of the United States' dominance, alongside the introduction of more tariffs, makes semiconductors the most highly impacted part of the technology industry.

To understand how the pricing of our semiconductors has changed, however, we need to refer to a bit of history.

The lowest cost of semiconductor imports for the United States was in October 2020, which has since seen an increase from 83.4% to 92.1% due to both COVID influencing the markets and a global chip shortage. Prices continued to increase due to the global chip shortage all the way through 2021 into 2022, later being followed by another price decrease in 2023. However, this does not mean that the manufacturing of semiconductors has gotten cheaper. Semiconductor manufacturers have since raised their prices by 6% due to the increasing costs of facilities and manufacturing processes. This is due to semiconductors becoming more complicated by design. As a result, semiconductor manufacturing facilities now average between $10-20 billion per fabrication facility as of 2024.

This affects component manufacturers like Nvidia, who are raising their GPU prices by 10-15% in order to remain profitable. This has a cascade effect on product manufacturers who are sourcing Nvidia GPUs, ultimately becoming involved in a trickle-down effect. Tariffs are ultimately being paid by our distributors and manufacturers, which are then passed down to consumers to absorb the costs of purchasing and manufacturing components and parts. Materials are also an additional cost due to these changes. Since the June 1, 2025 report provided by the Department of Commerce, we have seen an expansion of costs for steel and aluminum tariffs to 50%, which affects many of our household appliances. The data emphasizes increased costs on metals, electronics, vehicle parts, and other tech-related commodities for both the short and long term. Despite previous efforts to reduce the overhead in semiconductor manufacturing by introducing funding into domestic processes through Joe Biden's CHIPS Act, which was legislated in 2022, further costs have been added with tariff policy changes made by the Biden Administration. Such changes included a 25% to 50% semiconductor tariff increase as well as a 7.5% to 24% increase on steel and aluminum from China. Supposedly, tariff exemptions have been placed on semiconductors, energy commodities, and raw materials, and our policies also recognize the exacerbation of existing supply chain issues and shortages in 2025, but the damage has already been done.

So now that we have all the numbers and data out of the way... what does this mean for you?

Unfortunately, as the world gets more chaotic and expensive to maintain, not much is being done to help curb the reasons that things are so costly. The best thing you can do, as either a business or a consumer, is to optimize and find ways to make do with what you have. As the right to repair is also simultaneously being attacked, it's encouraged to support businesses and individuals who are looking to weather the storm by making current products last longer, finding ways to manufacture more efficiently, and localizing our efforts. While such changes may take a while to develop, there’s always a chance that the world can become a more resourceful place in spite of modern day events. Perhaps you can be the one of many to kick-start this today? Citations: TechTarget. "How US tariffs are reshaping the tech landscape." https://www.techtarget.com/whatis/feature/How-US-tariffs-are-reshaping-the-tech-landscape

The Budget Lab at Yale. "State of U.S Tariffs: June 17th, 2025." June 17, 2025. https://budgetlab.yale.edu/research/state-us-tariffs-june-17-2025

Khan, Saif M. "The Semiconductor Supply Chain." Center for Security and Emerging Technology, Georgetown University, January 2021. https://cset.georgetown.edu/publication/the-semiconductor-supply-chain/

World Scorecard. "US Tariffs and The World – Tariff Rates by Country." Revision July 2025. https://worldscorecard.com/world-facts-and-figures/us-tariffs-and-the-world/

U.S. Bureau of Labor Statistics. "Prices for import semiconductors up over the past 12 months." https://www.bls.gov/opub/ted/2022/prices-for-import-semiconductors-up-over-the-past-12-months.htm

U.S. Bureau of Labor Statistics. "Semiconductor Industry Facts." https://www.bls.gov/mxp/publications/industry-pamphlets/semiconductor-industry-facts.htm

Potter, Brian. "How to Build a $20 Billion Semiconductor Fab." Construction Physics, May 3, 2024. https://www.construction-physics.com/p/how-to-build-a-20-billion-semiconductor

Tom's Hardware. "TSMC to Hike Chip Prices in 2023." https://www.tomshardware.com/news/tsmc-to-hike-chip-prices-in-2023

Tom's Hardware. "Nvidia Reportedly Raises GPU Prices by 10-15 Percent as Manufacturing Costs Surge." https://www.tomshardware.com/pc-components/gpus/nvidia-reportedly-raises-gpu-prices-by-10-15-percent-as-manufacturing-costs-surge-tariffs-and-tsmc-price-hikes-filter-down-to-retailers

The White House. "FACT SHEET: President Biden Takes Action to Protect American Workers and Businesses from China's Unfair Trade Practices." May 14, 2024. https://bidenwhitehouse.archives.gov/briefing-room/statements-releases/2024/05/14/fact-sheet-president-biden-takes-action-to-protect-american-workers-and-businesses-from-chinas-unfair-trade-practices/