Top Distribution Execs Are Grappling With Financial Impact Of Tariffs

'Tariffs will be passed through from the OEMs or vendors to distribution, then from distribution out to our solution providers and ultimately to the end users,’ says Ingram Micro CEO Paul Bay.

Top executives from leading technology distributors, including Ingram Micro CEO Paul Bay, say they are preparing for the impact of higher costs on technology products in the wake of tariffs imposed by President Donald Trump.

“Tariffs will be passed through from the OEMs or vendors to distribution, then from distribution out to our solution providers and ultimately to the end users,” said Bay, who leads the $48 billion technology distribution powerhouse in an interview at the 2025 Global Technology Distribution Council in San Diego. “The real question is going to be, how much tolerance and elasticity is there from a pricing perspective to absorb the increased costs? And will that delay people's purchases? It depends on where the tariffs actually land and what country you’re in.”

President Trump Thursday said the 25 percent tariffs on imports from Mexico and Canada will go into effect March 4. Also going into effect March 4 President Trump said is a doubling on the 10 percent tariff on imports from China to 20 percent.

Bay said some technology product manufacturers have already started moving manufacturing in anticipation of the tariffs. “It's still early days in terms of what the final result is going to be, in terms of the tariffs in which countries,” he said. “It's going to play out over time.”

Sean Kerins, president and CEO of Arrow Electronics, said that the $27.9 billion distributor has experience dealing with tariffs imposed during the first Trump administration.

“We know what this looks like,” he said. “Muscle memories are in place, and our posture will be to pass those [increased costs] on to customers as transparently as possible. Not to make money, but just to recover the uplift.”

Patrick Zammit, who took the helm last September as CEO of $58.5 billion distributor TD Synnex, said the tariffs will have an impact on average selling prices of systems. “We’ve built up inventory so that we can, I would say, for a period of time, maintain prices, and then it will be what it will be,” he said.

D&H Distributing Co-President Dan Schwab said the SMB distribution stalwart is trying to get as much information from manufacturers regarding tariff strategies to inform solution provider partners so they will not be surprised by any price increases.

“It's our job to insulate them (partners) from surprises so they don't have surprises for their end users. So to me, what's paramount is communication,” he said. “Second, this is one of those ‘this too shall pass’ things because many of these manufacturers have already been through this. They already have the ability to stand up a new manufacturing center, or shift more volume, or kit it in a different country.”

The distributors are already starting to grapple with the fallout from tariffs imposed on items shipped to the U.S. from China.

Taiwan-based Acer this month said it will increase the cost of its PCs exported from China to the U.S. specifically in response to the 10 percent tariff imposed on items shipped to the U.S. from China.

IT products are a key export to the U.S., and a tariff on those imports could significantly impact prices U.S. businesses and consumers pay for their computing needs.

According to a February 2025 analysis from the U.S. government’s Bureau of Economic Analysis, among the top imports into the U.S. are:

• Computer accessories: $100.66 billion in 2024, up from $67.17 billion in 2023
• Computers: $116.73 billion in 2024, up from $88.45 billion in 2023
• Semiconductors: $81.94 billion in 2024, up from $72.53 billion in 2023
• Telecommunications equipment: $84.61 billion in 2024, up from $78.65 billion in 2023.

IDC President Crawford Del Prete, in a presentation at the GTDC Summit, said the impact of geopolitical factors such as tariffs and export controls is second only to the impact of AI with regard to the predictability of tech budgets.

Del Prete said that geopolitical factors with the tariffs are of more concern in Europe than in the U.S. “It’s almost like in this data, people outside the U.S. are saying, ‘Oh my God, what is happening.’ … And the U.S. is like, ‘We saw the first act. Don't get too panicked. Don't over-rotate on this,’” he said. “It is going to be very, very complicated.”

Here is an excerpt from CRN interviews with Bay, Kerins, Zammit and Schwab on the impact of the tariffs.

Sean Kerins, president and CEO, Arrow Electronics

The new U.S. administration is already starting to impose tariffs, which could impact IT products. How are you preparing for this? Is this going to be a big issue or not?

Fortunately or unfortunately, we already have experience with this. If you go back five or six years to when the first tariffs were imposed, we had to put a lot of process in place then. We know what this looks like. Muscle memories are in place, and our posture will be to pass those [increased costs] on to customers as transparently as possible. Not to make money, but just to recover the uplift.

I'm not yet certain how the Mexico and Canadian pieces will play out. I think we're all waiting to see what that really looks like when it's implemented. But we'll be prepared. But like I said, for better or for worse, we've already put processes in place to navigate this. We've been at it now for several years, so this will increase the scale of it a little bit, but you know, we'll do our best to pass that on to customers.

Do you think the vendors are ready for it?

Nobody's ever perfectly ready for something like this when it gets thrown at you. But some of the vendors in our component space have already been dealing with it anyway. Not to over-emphasize this, but I do think it's really important that as these tariffs play out and people fully understand what it means to their business model, they need to look to reconfigure their supply chains to best navigate that.

And so we try to turn that into something that is a positive for us, even though it is a headache at the very least, which is, ‘Hey, we can help you navigate any changes you want to make because we have supply chain assets throughout the world, and so if you want to do more in one part of the world and less in another, let's talk about how we can do that.’ I think that's a strength of anybody in the global distribution business to have accumulated enough warehouse logistics assets to be able to do that.

This month, we’ve already heard from Acer that the company will probably increase prices by 10 percent because of the tariffs. Have you heard of other vendors doing that yet or not?

Anecdotally, I’ve heard things like that. We haven't seen a lot of official pronouncements. We already have communicated with our customers in North America to this end. We've begun charging tariffs where appropriate. Again, we faced this five or six years ago. We had to figure out processes, and there were a lot of kinks and learnings along the way. But that benefits us now, because we can implement changes more swiftly.

Patrick Zammit, CEO, TD Synnex

There are some things that might disrupt the market, such as pending new tariffs. …

We are watching that for the moment. We don't see any impact from tariffs on demand or prices yet, but we are being very, very cautious here, as in watching what it means, working very closely with our vendors. Announcements about tariffs have been made but have not yet been implemented, such as a 25-percent tariff on chips.

That will have an impact on the ASP (average selling price) of the complete systems. If indeed those tariffs go through, there will be an increase in average selling prices. To what extent, we don't know. It depends on the policy of every vendor. So we've built up inventory so that we can, I would say, for a period of time, maintain prices, and then it will be what it will be.

So in the short term it could have a positive effect on revenue, and in the medium term it could have a negative effect on volumes. And again, it will depend on the magnitude of the tariffs, but it’s very difficult at the moment to judge what the impact will be. Very difficult.

Acer recently said the company is increasing its PC prices by 10 percent. Have you seen that from any other vendors?

I’m meeting with them, and I haven't heard anything yet. That's a risk for sure. But I would just add one thing. Talking about distribution in general, we work closely with the vendors, and we know the requirements and the challenges of our customers. We will adjust to the situation and make sure we can continue to serve the end users properly. That, I think, is our obsession, making sure that our resellers are in a position to support the end users and our vendors can continue to take their products to market. We will adjust accordingly as soon as we have clarity. We've done it in the past very successfully, and we will continue.

Dan Schwab, Co-president, D&H

The new U.S. administration is already starting to impose tariffs which could impact IT products. In response, Acer publicly said it will raise PC prices by 10 percent because of tariffs. What is D&H seeing? How are you preparing for this?

I see this as the third phase in the global supply chain diversification. Phase one happened during the tariffs imposed during the first Trump administration that forced people to review their supply chain. That then became exacerbated in the second phase, which was during COVID. So today, I think supply chains are much more resilient and diversified than they were at that time. We view this as more of a near- and mid-term impact versus a long-term impact, because many of the manufacturers that before only manufactured in China now may be in the Philippines or Vietnam or other countries. No one knows how this will evolve. Will there be tariffs on other countries? Will Canada and Mexico have tariffs or no? None of us really knows. What can we do?

First of all, we try and get as much information as we can from our manufacturers about their strategy, and inform our partners, because we don't want surprises. It's our job to insulate them from surprises so they don't have surprises for their end users. So to me, what's paramount is communication. Second, this is one of those ‘this too shall pass’ things because many of these manufacturers have already been through this. They already have the ability to stand up a new manufacturing center, or shift more volume, or kit it in a different country.

So we see this as, don’t hit the panic button, but be smart and make educated guesses. Who knows if this gets reversed for any country. You can't forego everything you've done, but instead start making calculated adjustments. And because this is the third iteration, I think it's more turning dials than everyone making a hard left.

Paul Bay, CEO, Ingram Micro

What is Ingram Micro seeing in terms of tariffs, and how are you preparing for them?

We're following the manufacturers from where they're moving, producing, and manufacturing their equipment at a high level. Some of these had already started to make movements knowing that there's going to be a potential change in government. And so we've made sure that, in the territories where we are, we have the right amount of inventory, and we'll pass through [the increased costs] as the tariffs come through. It's still early days in terms of what the final result is going to be, in terms of the tariffs in which countries. It's going to play out over time.

Tariffs will be passed through from the OEMs or vendors to distribution, then from distribution out to our solution providers and ultimately to the end users. The real question is going to be, how much tolerance and elasticity is there from a pricing perspective to absorb the increased costs? And will that delay people's purchases? It depends on where the tariffs actually land and what country you’re in.

We’ve already seen Acer say that company will raise prices by 10 percent because of tariffs. Have you seen any other vendors announce that?

Yes, there are others who have already started making price increases based off tariffs.