For the U.S. technology industry, the worst-case scenario is off the table…for now. The 90-day tariff relief on certain key technology imports into the U.S.--including consumer products such as PCs, smartphones, and core IT hardware--provides short-term relief to the industry. However, the pause does not remove the uncertainty around the timing and the ultimate rates.

S&P Global Ratings published, "Tariff Uncertainty Will Weigh On U.S. Tech Credit Outlooks," which details our preliminary view that global IT spending growth will slow to 5%-7% in 2025 compared to our previous forecast of 9%. "We expect revenue and margin headwinds throughout 2025 for our rated hardware and semiconductor issuers as they wrestle with tariff-induced demand destruction and margin compression," said S&P Global Ratings credit analyst Andrew Chang.
S&P Global Ratings expects growing downgrade risks even if tariff rates are lowered over time. In March 2025, negative rating actions in the U.S. technology sector outnumbered positives by 5:2, reversing a positive trend seen since June 2024. "However," noted credit analyst Andrew Chang, "we have not yet taken rating actions directly related to tariff announcements because of potential mitigants within the supply chain, cushion within ratings, uncertainty around the permanence of the proposed tariffs, and the potential for a more permanent technology-specific exemption."

"S&P Global Ratings is more focused on the secondary order impact of a weakening macroeconomy on the U.S. tech sector," added S&P Global Ratings credit analyst David Tsui. "We will continue to review our rated issuers and could lower ratings on those with little to no cushion at the current ratings or those dependent on a positive operating environment to improve credit metrics."

We expect the PC and smartphone sectors will be most affected by tariffs, while hardware issuers that focus on server, storage, and networking equipment products will be less affected. Additionally, though semiconductor imports are exempt from tariffs, that could change in coming weeks. Lastly, software is not currently subject to tariffs, though sustained macroeconomic weakness will inevitably slow revenue growth at the margin.