How Will Bay Area Tech Companies Handle Trump’s Tariffs?
The tariffs enacted by President Donald Trump have almost immediately caused financial chaos in San Francisco. The affordable housing industry and small business owners in Chinatown are each feeling a significant pinch in the pocketbook.
At first blush, it may appear to a layperson as though the technology industry, particularly in San Francisco and the Bay Area, is cushioned from these grim prospects. Companies like Doordash, Uber, and Dropbox are primarily service-based, and their apps, developed and coded in San Francisco, naturally are made in the U.S.A. Plus, it stands to reason people will always need grocery deliveries, rides home from the bar, and cloud storage, no matter how bad the economy gets.
However, the Bay Area’s more hardware-centric tech companies may be affected by the circumstances at hand. For example, although Apple is headquartered in Cupertino, California, a significant portion of its products, particularly iPhones, are assembled in China, against which Trump has levied an exorbitant 145% baseline tariff, which more than doubles the retail price. Another tech company, Nvidia, headquartered in nearby Santa Clara, outsources the manufacture of its hardware and components to Taiwan, a country against which Trump has levied a 32% tariff.
As many of the tech companies inside San Francisco, such as OpenAI, are dependent upon equipment made in Asia, their operating costs may substantially increase due to Trump’s tariffs. The tariffs will also affect the tech companies’ overseas operations and create tension with customers in countries where they do business. This will precipitate disruptions in the supply chain, increased prices, and reduced demand.
However, former OpenAI executive Zack Kass is sanguine about the Trump regime’s tariffs. In a LinkedIn post from early April, he writes:
“Intended or not, this global trade war acts as an unprecedented forcing function, compelling companies to harness AI to offset rising costs, optimize operations, and build essential resilience. As Tobi Lutke, Shopify’s CEO said recently, ‘Reflexive AI usage is now a baseline expectation at Shopify.’
“In short: technology trumps tariffs. The momentum behind AI is economically and strategically unstoppable. Anticipate short-term cost pressures, but expect even greater long-term acceleration in AI adoption and innovation.”
Other people in the tech industry aren’t quite so optimistic. Filip Jaroš, a software engineer at Pinterest, says, “Sales deals and relationships [Pinterest has] built with overseas clients are strained and we’re not sure if they will continue spending on the platform in the future and if it will be enough to meet the revenue expectations set for us by the stock market. If [the Trump regime] makes it tough for [tech] companies to provide services to overseas markets, the companies cannot grow.”
Photo by LYCS Architecture via Unsplash
In the event that these excessive and unnecessary tariffs cause a recession, the tech industry’s sales and profits will further be considerably diminished. Such an event will compound problems the industry has been grappling with since 2022, such as growing unease among consumers and an alarming number of layoffs. In addition, both Apple and Nvidia have each navigated a choppy start to the second quarter of 2025 in the stock market, taking significant losses early in April.
Trump is using the tariffs to punish countries he accuses of ripping off the United States, but he says his rationale is to motivate U.S. consumers to buy more American made goods as well as raise revenue for the U.S. government. Unfortunately, he hasn’t taken into account that the outsourcing of manufacturing jobs that began in the 1960s accelerated in the 1980s and more or less became entrenched ever since, especially in the technology industry. And make no mistake, even though Trump has repeatedly said that foreign governments would have to pay the tariffs, the cost will inevitably be transferred to us consumers. And if consumers end up faced with rising prices as a result of supply chain issues and increased production and distribution costs as a result of these tariffs, they are liable to spend less money. If consumers spend less money, the treasuries at the state, local, and federal levels will have fewer opportunities to collect taxes on sales, wages, and corporate income.
As a result, the tariffs will inevitably defeat their own purpose of raising revenue for the U.S. When it comes to the tariffs’ collateral damage on the tech industry, much of which will be concentrated in the Bay Area and especially San Francisco proper, all bets are off. As much as I don’t want to be a prophet of doom, the possibilities are endless, but I can’t see any good ones.
Howdy! My name is Katy Atchison and I'm an Associate Editor for Broke-Ass Stuart.
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