Writer: Jordan Sprogis
Editor: Lillian Castro
Reviewer: Cristian Lopez
In early February, President Trump imposed tariffs on all imports from China, Mexico, and Canada to the U.S. The 10% tariff on Chinese imports is already in effect, while imports from Canada and Mexico will see a 25% tariff, which was delayed to March 4.
These tariffs are part of the administration’s goal to halt illegal immigration and the flow of drugs, including fentanyl, into the U.S. They also align with the administration’s “America-first” approach, hoping that high taxes on imported goods will encourage domestic manufacturing.
On February 18, Trump also proposed a 25% tariff on imports from Taiwan, stating rates may “go very substantially higher over a course of a year.” Taiwan supplies nearly 65% of the world’s semiconductors — but the U.S. depends on it for up to 90% of our chip supply.
In response, China and Taiwan have expressed a willingness to find a loophole for American companies, which may include exploring partnerships and relocating production to other countries. This is a supply chain strategy known as China Plus One, and it has been historically used to reduce disruption, save on costs, access new markets, or comply with regulatory rules.
Apple is also investing heavily to mitigate the impact: On February 24, it announced plans to build a server manufacturing facility, produce silicon chips, and establish a manufacturing academy over the next four years.
In the meantime, Trump has acknowledged that Americans may feel “some pain” as the economy adjusts. To get insights on how these tariffs might impact businesses and what they can do to minimize the hurt, we spoke with Bruce Kornfeld, an industry veteran and CPO of StorMagic.
The transcript has been edited for formatting. Here’s Bruce.
With tariffs possibly being put in place on IT goods and hardware, businesses are concerned that the cost of equipment might skyrocket out of nowhere. What would be your advice to those businesses that are bracing for a spike in hardware costs?
It may be time to rethink strategy and architecture. There has been significant innovation and improvement in processing and storage power, reliability and simplicity over the last few years.
Rising hardware costs could be a catalyst for reducing infrastructure needs — fewer servers, a shift to modern computing approaches, or moving off of VMware to cut unnecessary costs. Businesses that embrace efficiency will be better positioned to weather pricing volatility.
If imposed, how will these tariffs on IT equipment further impact competition in the U.S. market, especially businesses that rely on newer hardware to stay agile in the industry?
The tariffs, by design, will help IT infrastructure providers that manufacture in the U.S. Hardware providers producing domestically may become more competitive than those that import full solutions.
However, it’s important to note that many U.S.-based manufacturers still source critical components from abroad, so the actual cost advantage remains uncertain. Given these unknowns, IT teams will need to monitor tariff developments over the next few months before making long-term purchasing decisions.
What might be the result for U.S. businesses that struggle to keep up with rising tech prices and demanding IT needs?
The winners will likely be the ones that figure out new ways to solve their business problems. Those who rethink their IT infrastructure — whether by shifting to the cloud, adopting HCI, or optimizing hardware needs — will be in a stronger financial position.
The traditional model of building large, on-prem environments may no longer be the best approach. The key is to find solutions that reduce hardware reliance while maintaining performance.
How have you been staying in the know when it comes to navigating tech industry changes and identifying when businesses should quickly adapt?
It is still too early to know what will happen with tariffs. While trade policies are being debated, it’s possible tariffs are being used as a negotiation tactic rather than a long-term reality.
The key takeaway? Businesses should stay informed but avoid overreacting until clearer policies are in place. Right now, the best approach is planning for multiple scenarios rather than making drastic changes based on speculation.
How can StorMagic help businesses reduce IT costs ahead of the tariffs impacting hardware goods, and are there other solutions you can recommend to our readers that may assist them with rising IT costs?
There are two clear paths businesses should explore:
First is hyper-converged infrastructure (HCI): HCI reduces overall hardware needs while increasing efficiency, making it a cost-effective alternative to traditional IT environments. Secondly, VMware alternatives: With rising costs and licensing complexities, many businesses are migrating away from VMware to more affordable, streamlined virtualization solutions.
StorMagic’s SvHCI is one such option for businesses looking for flexibility and savings.
Do you have any final thoughts for our readers regarding rising tech prices and how businesses can keep their costs down during these unprecedented times?
In short: Be proactive, not reactive.
IT leaders should view rising costs as an opportunity to modernize, optimize, and rethink their infrastructure strategy. Those who take steps now — whether by consolidating hardware, leveraging HCI, or reducing reliance on expensive legacy solutions — will be in a stronger position regardless of how trade policies unfold.
Bruce Kornfeld is the Chief Product Officer at StorMagic, a company that specializes in edge data storage solutions. With more than 30 years of experience in the technology sector, Bruce aids StorMagic in its mission to simplify complex IT infrastructure, improve data visibility, and reduce costs for enterprise edge and small to medium-sized businesses (SMBs).
