Probrand, the IT procurement platform, is urging IT buyers to plan purchases now, and secure order prices ahead of future increases triggered by global tariffs.
The Trump administration initially imposed a 25% tariff on all imports from Mexico and Canada – although certain goods have since been made exempt. Plans to double tariffs on Canadian steel and metal imports to 50% were also halted less than 24 hours after being announced. Elsewhere, the US has doubled the original levy for goods being imported from China to 20%.
This is having an impact on the IT supply chain, with price increases inevitable. In the last week alone, Probrand has spoken to several vendors who indicate that prices could potentially increase by as much as 7% – but that the impact on future final prices is still very difficult to predict.
Trish Taylor, supply chain manager at Probrand shared, ‘‘Already, we’ve seen President Trump revising decisions, with sudden changes in direction making it difficult for buyers to anticipate and plan. To protect their budgets and avoid paying more, buyers need to be proactive and look at opportunities to bring any purchases forward.’’
It will be difficult for manufacturers to mitigate the impact of tariffs in the short term, so to protect margins, costs are likely to be passed on to the buyer.
Probrand advises buyers to follow three key steps:
Take a strategic approach and plan purchases – Buyers should look at the business goals for the next 12–18 months and identify any opportunities to bring projects forward. Even if IT equipment isn’t needed right now, taking action to ringfence and reserve stock means you can secure it at today’s prices.
Consider diversifying your IT estate. Many organisations will return to the same preferred brands when purchasing IT. To avoid any potential issues around stock and price however, buyers should shop around and consider brands that aren’t overly reliant on manufacturing in China for example and have facilities in other locations such as Southeast Asia and Europe.
Keep a close watch on currency movements as tariffs impact markets. Exchange rates play a significant role in fuelling price volatility in the IT supply chain, impacting everything from the cost of components to cross-border logistics charges. With most IT across the supply chain bought first in dollars, and then GBP, buyers should keep a close watch on currency movements to see where they are having an impact on final price.
For more tips on how to navigate the volatile IT procurement market, please visit the Probrand blog page here.