US President Donald Trump’s escalating tariff war is expected to upend the IT investment plans of global CIOs and greatly impact all sectors of the IT industry in the coming months, slowing adoption of AI and damaging long-established supply chains, perhaps for good.
Based on the current — but fluid — tariff schedule, IDC halved its forecast for projected IT spending growth from 10% to 5% in 2025. The research firm, which now pegs the risk of global recession at 40%, said that growth could be even lower, with China issuing a retaliatory tariff against the US in excess of 30% and European leaders meeting to agree on their responses to the United States. President Trump today threatened an additional 50% tariff on China beginning Wednesday if China did not rescind its retaliatory tariffs.
“The wave of new tariffs introduced by the US administration will drive up technology prices, disrupt supply chains, and weaken global IT spending in 2025. Not only will these tariffs have a direct inflationary effect on technology prices in the US, but growing concerns about a broader economic slowdown will lead to weaker investment by businesses and consumers around the world, even prior to any slowdowns appearing in earnings or economic data,” IDC wrote in its report. “This impact will unfold quickly in 2025, despite the strong countervailing force of growing demand for AI and related technologies.”
