The tariff blow is not just hitting Apple, Morgan Stanley: US tech hardware has nowhere to hide!

Trump's latest announced tariff policy will deal a devastating blow to the U.S. technology hardware industry, leaving companies with almost no means of coping.

On April 3rd, Morgan Stanley stated in its latest research report that "reciprocal tariffs" will subject technology hardware products sold to the U.S. to tariffs ranging from 25% to 54%, putting the U.S. technology hardware industry, which relies on overseas production bases, in an unprecedented predicament.

Wall Street Journal previously reported that Apple has no factories in the U.S., with almost all of its products produced overseas, making the company particularly vulnerable under Trump's new tariff policy.

Technology Hardware Companies Have Nowhere to Hide

Trump's tariffs not only severely impact Apple; according to Morgan Stanley's report, technology hardware companies such as Dell, HP, Logitech, Sonos, Circut, and GoPro, which heavily rely on overseas production bases, will also face setbacks.

Most of these companies' technology hardware products sold to the U.S. are assembled in Southeast Asian countries:

Apple has shifted about 15% of its iPhone production to India, and all MacBooks shipped to the U.S. are currently produced in Vietnam;

Dell and HP have moved the production of laptops shipped to the U.S. to Vietnam and Thailand, respectively;

Almost all speakers shipped to the U.S. by Sonos are assembled in Malaysia and Vietnam.

On April 2nd local time, the White House issued a statement saying that President Trump will impose a 10% "baseline tariff" on all countries. According to the chart released by the White House, the U.S. will impose a 46% tariff on goods imported from Vietnam, a 26% tariff on goods from India, a 24% tariff on Malaysia, and a 36% tariff on Thailand.

Morgan Stanley estimates that these tariffs will impose approximately $51 billion in additional costs on technology hardware companies such as Apple, Dell, and HP (equivalent to 30% of these companies' EBIT).

These costs will be borne by manufacturers, end customers, or shared by both parties.

For Apple, the additional tariff costs could reach $33.3 billion (26% of its EBIT for fiscal year 2025). The situation is even more severe for Dell and HP, where tariff costs could nearly equal their expected net profits for 2025.

Price Increases Become the Only Realistic Option?

Morgan Stanley pointed out in its report that faced with tariffs effective at 12:01 AM on April 9th, technology hardware companies have almost no tools available to alleviate the situation:

Pre-production/stockpiling inventory is nearly impossible

Supply chain diversification takes too long

Shifting products to countries with more favorable tariffs (such as a 10% "baseline tariff") may be a potential mitigation tool, but it depends on the available infrastructure.

Therefore, Morgan Stanley believes that raising prices has become the most realistic option, but this will inevitably have a negative impact on demand, especially considering that certain prices may need to be raised by 12%-19% to offset tariff costs