The global PC industry is facing backlash from the tariff storm sparked by Trump. This year, the demand for artificial intelligence (AI) PCs was expected to boost the laptop market significantly; however, due to random tariffs imposed by the United States, PC corporations are adjusting their business outlook downwards. Global PC corporations threatened by declining revenue due to tariff burdens are hastening their measures, such as transferring production plants to the United States or raising the prices of products sold within the country.
According to market research firm Digitimes Research, global laptop shipments are expected to drop by 7.9% in the first quarter of this year compared to the previous year. In the fourth quarter of last year, PC distributors proactively increased their inventories in anticipation of tariffs imposed by the Trump administration, and have been reducing orders this year. The expected replacement demand is also not rising easily, leading PC distributors to adopt a cautious approach towards increasing orders.
Trump's announcement of tariffs doused the rebound signs in the laptop market. The U.S. administration has imposed an additional 10% tariff on all Chinese imports as of February 4, along with another 10% starting March 3, bringing the total tariff to 20%. China is a major production base for global laptops, accounting for approximately 89% of global production. Initially, the laptop market was expected to grow by more than 4% year-on-year, driven by device upgrade demand due to the end of Windows 10 support and AI PC demand; however, as tariff burdens worsen corporate revenue, a cautious sentiment is spreading throughout the industry.
HP, the world's second-largest PC corporation, acknowledged that it is inevitable for its performance to be adversely affected by tariffs. In a performance announcement on March 27 (local time), HP presented a lower-than-expected profit outlook for the second quarter of the 2025 fiscal year (February to April), stating, "Tariffs on Chinese imports and rising expense costs are burdening our profitability." Lenovo, the world's largest PC corporation with production facilities concentrated in China, also anticipates a significant decline in PC shipments in the first quarter of this year, having greatly increased its inventory in the fourth quarter of last year in preparation for U.S. tariffs.
PC corporations facing urgent challenges are responding by either transferring their bases out of China or raising product prices. HP is even considering transferring some manufacturing facilities to the United States to align with Trump's "Made in America" policy. Enrique Lores, HP's chief executive officer, stated, "By the end of the 2025 fiscal year (October 31), we will reduce the proportion of products sold in North America that are made in China to below 10%," adding, "Transitioning to manufacturing in the U.S. is one of the scenarios we are considering." However, he noted, "If we move to the U.S., it will require not only assembly but also the transfer of various parts and suppliers, so the evaluation will take considerable time."
The problem is that Trump's tariff threats are ongoing. Trump has currently suspended the 25% tariff imposed on Mexico and Canada for the third time, as Mexico is also a significant production base for the PC industry. Lenovo operates a large-scale server assembly plant in Mexico, and HP has been increasing PC production there, transferring some laptop manufacturing from China to Mexico. Lores said, "If additional tariffs are imposed (on Mexico, etc.), we will manage the risks as we diversified our supply chain in China and take necessary action regarding expense improvements and pricing as needed." HP plans to cut up to 2,000 employees this year to reduce expenses.
Taiwanese PC corporation Acer has decided to raise its laptop sales prices in the U.S. by 10%, and if additional tariffs are imposed, prices are expected to rise further. A relevant industry source noted, "The anticipated AI PC is already costly, and the added tariffs make it urgent to devise a response," adding, "It's just a matter of time before prices of products sold in the U.S. increase."