Stock markets plummeted Friday, the day after President Donald Trump signed an executive order slapping new tariffs on dozens of countries that could reshape the world economy.
But what has Silicon Valley and tech hubs rattled is the ongoing impact of tariffs, and their cumulative cost. The sweeping tariffs have already gouged the bottom line of Apple Inc. and cast uncertainty on Amazon.com Inc. sales, as well as unsettled major automakers — all of which have relied on overseas manufacturing to maximize profits and keep consumer prices low.
“The narrative often stops at ‘iPhones will cost more.’ But the real impact hits product teams delaying launches, enterprise buyers renegotiating terms, and product leads cutting features to hit new cost ceilings,” SCIP CEO Andy Kohm said. “This is how innovation quietly dies.”
On Thursday, Apple said it paid $800 million in tariffs during its recently completed quarter and expects to pay $1.1 billion this quarter. General Motors Corp., Stellantis and Volkswagen all reported tariff costs of more than $1 billion over the past quarter. On Thursday, Ford Motor Co. reported it expected tariffs to cost it $2 billion this year.
Meanwhile, Amazon CEO Andy Jassy told investors “it’s impossible to know” what impact tariffs will have on retail prices and consumption. But he warned, “If costs end up being higher, we will absorb them, but what we can share is what we’ve seen thus far, through the first half of the year, we haven’t yet seen diminishing demand nor prices meaningfully appreciating.”
The latest levies against Switzerland (39%), Canada (35%), India (25%), and Taiwan (20%), among others — are scheduled to start Aug. 7. On Thursday, Mexico agreed to a 90-day continuation at its current 25% tariff rate. The White House also reached an accord with the European Union. A 55% tariff on China, announced June 11, is set to start next week. New tariffs against Vietnam (20%) and others are intended to intercept indirect shipments from China.
The White House said the new tariff list separates U.S. trading partners into three segments. If the U.S. has a trade surplus with a country, that nation’s goods will face a 10% tariff rate. If the U.S. has a small trade deficit, imports from that country will generally face 15% tariffs. And countries that the U.S. has larger deficits with face higher tariffs.
In the days leading up to the latest flurry of tariff-related activity, the White House announced agreements with nations and blocs ahead of the president’s self-imposed Friday deadline
“If our Country was not able to protect itself by using TARIFFS AGAINST TARIFFS, WE WOULD BE ‘DEAD,’ WITH NO CHANCE OF SURVIVAL OR SUCCESS,” the president said on Truth Social on Thursday.
An appeals court on Thursday scrutinized President Trump’s assertion that emergency powers justify his worldwide tariffs.
At the same time, a wobbly jobs report Friday marked a significant slowdown: The U.S. added 73,000 jobs in July, compared with 104,000 expected and well below an average of 130,000 jobs added each month this year, according to data from the U.S. Bureau of Labor Statistics. Job numbers for previous months, meanwhile, were drastically reduced.
“The economy is being propped up by rapid buildout and deployment of AI, but today’s soft jobs report is a warning that tariffs are slowing growth,” said Nari Viswanathan, senior director of supply chain strategy at Coupa, which oversees $8 trillion in global business spending.
“If consumer purchasing power continues to deteriorate and companies begin passing tariff costs onto the consumer, we could be heading for an untenable situation with employment falling while the price of goods is going up,” he said.
Nearly half of U.S. businesses are already passing tariff costs directly to customers, signaling a major shift in how companies handle trade pressures, according to a survey from Zilliant.
“The impact may not be immediate – as many companies are still selling through pre-tariff inventory – but the pressure will intensify as they restock at higher costs,” Zilliant CEO Pascal Yammine said. “The winners will be those who planned by adapting pricing strategies and staying transparent with customers on price increases. The rest risk customer backlash, shrinking margins, and falling behind in a more volatile market.”
“Supply chain is in its disruption era, and 2025 is already the most volatile year for global trade in recent memory,” said Mark Morgan, president of commercial operations at Kinaxis. “In just six months, tariff activity has doubled the pace of the 2017–2020 trade war. This time, it’s moving faster, hitting more sectors, including tech, and proving far harder to predict. Behind the scenes, scenario planning activity nearly doubled in Q2 2025 versus last year.”
Fear of tariffs and uncertainty over the implications of widespread artificial intelligence (AI) use within cost-cutting companies isn’t likely to appease job seekers, those already employed, or college graduates, economic experts point out.
“One of the most dangerous impacts of tariffs isn’t visible to the consumer,” Kohm said. “Its launches are getting pushed a quarter, the features are quietly disappearing, and the enterprise buyers suddenly want to reprice the whole deal. Eventually, what shows up in the market is a product that technically ships but isn’t what the customer wants.”
Object Edge CEO Rohit Garewal has a contrarian view: He believes tariffs will accelerate AI’s adoption. “Rather than stifling innovation, tariffs and labor constraints, which are margin compression agents, will drive faster enterprise investment in AI as companies chase margin expansion through automation and smarter workflows,” he said.
“This is something we saw in China with DeepSeek. The artificial constraints the USA put on China actually drove AI innovation,” Garewal added.
