Laptop makers, sellers emphasize tactical tariff actions

• Laptop computer manufacturers and retailers have had to negotiate the uncertainties of US tariff policy, with the main upcoming event being a decision on Section 232 duties potentially as soon as late June.
• Some firms in the sector have used selective pricing increases to pass through the higher tariffs already faced before the Section 232 review was instigated, but not all. At the retail level, firms are treating price rises as a “last resort” and instead are looking to negotiate lower prices with suppliers. US import prices for computers and electronics from mainland China fell by 4.2% year over year in April, while those from ASEAN dipped by just 0.2%.
• Firms have tended to cut inventories over time due to elevated interest rates, though tariff front-loading has been seen, with two out of the big three laptop makers increasing their inventory-days ahead of tariffs.
• Diversification away from mainland China for US-bound machines has been a long-term trend for the sector, culminating in total Chinese exports of laptops to the US falling 47.6% year over year in April, while shipments to the rest of the world improved. 

Manufacturers and retailers of laptop computers have had to deal with a rapidly shifting set of tariffs in 2025. After facing an initial round of IEEPA country-based tariffs they received an exemption while the Section 232 review of electronics continues.

There are few public details on the progress of the Section 232 review so far, though comments from US President Donald J. Trump regarding smartphones suggest tariffs could be put in place as soon as late June.

In the meantime, the main manufacturers and retailers with US market exposure are focused on tactical responses including pricing, cost controls and inventory. A review of the earnings comments from three large laptop makers and one major electronics retailer includes statements including:

• One firm noted it “drove disciplined pricing actions to help mitigate increased tariff and component costs” while it also “shifted mix toward premium categories” where profit margins tend to be higher.
• A second stated the original tariffs on mainland China had “already (been) prepared for … to adjust the pricing.” However, “when the 25% (Section 232 electronics) tariff was announced in March and also was implemented so suddenly that we didn't even have time to prepare.”
• Not all firms increased prices, either noting a preference to preserve market share or to use price increases “as a last resort, we adjust prices as tariff-related inventory cost changes are implemented.” The latter refers to the first-in, first-out accounting principle which reflects the firm notionally selling “pre-tariff” inventory first.

The other side of the coin is attempting to share the costs of tariffs with suppliers by asking for price reductions as well as accelerating other cost cutting programs. 

One firm noted it was “able to partially offset (tariffs) in the quarter through cost actions” including optimizing for lower tariff rates for onward exports by removing “the U.S. as a distribution hub for products that will be going to Canada or to Latin America.”

Market Intelligence data shows that US import prices on computing equipment and electronics from mainland China fell by 4.19% year over year in April 2025, while shipments from ASEAN dipped by 0.1% and those from Japan and the EU increased by 2.25% and 1.29% respectively.

Firms have tended to cut rather than raise inventories over the longer term due to the elevated cost-to-carry resulting from higher interest rates. Tactically though, short-term front-loading and the use of bonded warehousing and foreign trade zones means inventories have increased in the latest quarter.  

Two of the big laptop makers noted they “had some customers pulling demand (forward)”, and have also increased the number of days of sales held in inventory, with one increasing to 29 days of sales in the three months to May 2, 2025, from 20 days a year earlier. 

Firms have aggressively cut back their sourcing from mainland China over the longer-term, with an acceleration recently. Market Intelligence data shows Chinese exports of laptops to the US fell by 47.6% year over year in April. Exports to the EU meanwhile rose by 5.5% and those to the rest of the world increased 16.0%. 

That extends a longer-term trend which has seen exports to the US fall by 14.4% in the first four months of 2025 compared to the same period of 2017 while total exports still rose by 3.8%. Laptop computers had been a notable absentee from Section 301 duties applied since 2018, giving firms time to restructure their US-bound supply chains.

One firm noted it expects “literally all” production for the US to come from outside China. That means it has been “significantly accelerating our previous plan.” Another has flagged the inherent versatility in previously built diversification, noting that within “a couple of weeks, we can finish the adjustment to shift the capacity from one location to another” as the firm has “multiple manufacturing facilities in probably more than 10 countries.” 

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.