Will Trump's tariffs on China produce a new graphics cards shortage? One PC vendor reports that suppliers are halting GPU shipments to the US to avoid high tariff costs.

“Most the ODMs [original design manufacturers] we have talked to have completely paused importing product, and are not accepting orders,” says Jon Bach, president of Puget Systems, a vendor in Washington state that sells custom PCs, mainly to businesses.

Suppliers are hitting pause because Trump’s 145% tariff ensnares PC graphics cards, which are primarily made in China and face no exemption from the trade policy.

According to Bach, GPU suppliers for his company started halting shipments on April 2, when President Trump initially announced his “reciprocal tariffs.” The president has since dialed back most of the reciprocal tariffs, for 90 days at least, but not for China, where the bulk of electronics and PC components are made.

“Because the tariff situation is still changing daily with China, I believe that most companies are taking a ‘wait and see’ approach,” Bach says, later adding: “All of our partners are manufacturing [graphics cards] in China. You don’t want to bring in a product at a 145% percent rate and then tomorrow have it potentially go to another, lower number.”

The hope is that Trump will de-escalate his trade war with China, resulting in a lower or no tariff rate for Chinese imports. But in the meantime, the pause in shipments risks creating a “catastrophic” GPU shortage for PC makers like Puget Systems and consumers. “It’s just a matter of time before we run out; we are still okay for the next 30 to 60 days,” Bach says of his own business, which sources GPUs from Asus, MSI, and Gigabyte.

A 145% tariff is also extremely high for GeForce RTX 5000 GPU vendors, which buy the graphics chips from Nvidia, and then pack them inside a graphics card assembled in China. These third-party vendors are then left with the tariff bill when they import to the US.

As a hypothetical example, Bach says Nvidia might sell a graphics chip to a third-party vendor for $700, which then spends another $100 to assemble it into an actual PC graphics card. So, the total manufacturing cost of the product is $800. But a 145% tariff forces the third-party vendor to pay $1,160 to import the product into the US before it’s even sold to the consumer.

Other cheaper PC components from China, such as a $150 motherboard, could still remain somewhat affordable with a 145% tariff. “But with a $2,000 video card, it’s just not,” Bach says.

Not everyone has encountered a GPU shipment pause. Falcon Northwest, another custom PC desktop maker, told us it hasn't seen suppliers stop shipments yet. But Ryan Reith, an analyst for IDC, has heard of some PC and phone suppliers halting or slowing down their manufacturing in China in response to Trump’s tariffs. (Taiwan's Commercial Times reports the same, saying HP, Lenovo, and Dell have paused US-bound shipments for two weeks.)

“It’s not a complete halt,” Reith says, but he adds: “Our assumption at this point is that a lot of these companies are evaluating: Does it make sense to put everything on pause there? Or does it make sense to redirect those through other markets" where the tariff is at 10%?

PC component supplier SilverStone also indicates the 145% tariff is forcing it to hold back some inventory. "With the speed at which these changes are coming, we really can’t properly plan what we can do at this point," the Taiwan-based company says. "We still have products that we like to import, but we may only prioritize ones that we think can still sell with the huge price increases."

In the meantime, Bach expects the 145% tariff on Chinese imports to affect a wide range of PCs parts since most are made in China. Trump’s tariff order appears to have only exempted processors, such as CPUs. As a result, Bach is advising consumers to hold off on ordering a new computer unless they have an urgent need. “You shouldn’t buy it if you can wait it out,” he says.

In some good news, Bach says many suppliers are migrating their production from China to other markets such as Taiwan and Vietnam, which currently face only a 10% tariff. For Puget Systems, Bach notes the company is receiving a new shipment of laptops containing RTX 5090 GPUs that were built in Taiwan rather than China.

Suppliers "are still going to do some manufacturing in China, like for cables and panels for cases,” he says. But to avoid the tariffs on China, he predicts many companies will ship unfinished supplies to Vietnam for final assembly. The only problem is that graphics card assembly requires more advanced manufacturing, compared to simpler PC components, making it harder for suppliers to abandon China.

In the short term, the PC market risks huge price increases along with component shortages if the 145% tariff on Chinese imports persists. Bach expects the pain to hit in one or two months as inventories decline.

"The fact that everything could go into shortage means the price would also go up, regardless of tariff," he says. To keep PC customers informed, Puget Systems has a blog with updates about the tariff situation.

By: DocMemory
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