Global IT spending is set to suffer in 2025 due to the wave of new tariffs introduced by the US administration as technology prices skyrocket and supply chains are disrupted, according to the IDC.

The research foundation says that global IT spending could be cut in half over the next six months as a result of the wide-ranging tariffs.

Not only will these tariffs have a direct inflationary effect on technology prices in the US, but growing concerns about a broader economic slowdown will lead to weaker investment by businesses and consumers around the world, even prior to any slowdowns appearing in earnings or economic data.

The IDC published a ‘downside scenario’ on 31 March, predicting that global IT spending would grow by 5%, rather than the 10% growth it currently projected in its baseline forecast. While this scenario was modelled before the latest tariff announcements in April, it did take in to account the potential impact of a broadening economic slowdown.

While the details of final tariffs don’t align exactly with that downside scenario, the IDC expects its baseline forecast will move towards the lower end of that 5-10% range over the next few weeks.

The IDC is therefore creating a new downside scenario to reflect the possibility of a broadening global trade war, which could include additional tariffs and retaliatory measures by many countries.

“This situation remains highly fluid and dynamic,” the IDC said in a blog post. “Tariffs set to be implemented on April 9 may yet be adjusted or postponed, and the response in other countries could include stimulus measures to protect short-term economic stability in China and elsewhere.

“This is a moving target, but the risk of a global recession is higher than one week ago, with some economists now pegging it at 40%, and this uncertainty will have an immediate effect on business and consumer confidence.”

The IDC says the affects of the new tariffs will have an “inflationary impact on tech prices in the US, as well as disrupting the wider supply chain.

Recommended reading

• Can Europe ‘Trump-Proof’ Its Cloud Services?
• Spring Statement: What Was Announced & What’s The Reaction Been?
• Gartner: Global IT Spending to Grow 9.8% in 2025

This impact is expected to be most immediate in devices, compute, storage, and network hardware, as well as data centre construction, and it is likely that software and services will also be affected if the tariffs are implemented for longer.

Despite mitigation efforts, US customers can expect to feel the effect of higher prices almost immediately, with price hikes materialising rapidly.

“The broad, unfocused nature of these new tariffs leaves manufacturers little room to adjust,” the IDC said.

While the research foundation expects that service providers will try to maintain their investments in AI, it is in no doubt that the slowing economy will have a direct impact on IT spending.