Networking Vendors, Solution Providers Navigate Uncertainty In New Tariff Landscape

‘Tariffs on metals, fuels and manufactured goods have far-reaching impacts that are driving up costs and adding complexity to the supply chain ... all the ingredients for complete disruption are in place,’ Extreme Networks COO Norman Rice tells CRN in an email.

Global trade dynamics continue to be fluid due to the tariffs that were introduced by the Trump administration earlier this month, according to networking specialist Extreme Networks.

“Tariffs on metals, fuels and manufactured goods have far-reaching impacts that are driving up costs and adding complexity to the supply chain. Trade routes, shipments, sourcing and production are already seeing higher expenses, and as import tariff programs begin to be implemented at borders across the globe, all the ingredients for complete disruption are in place. The result: higher costs and delayed availability of finished goods,” Norman Rice, Extreme Networks’ COO, told CRN in an email.

President Trump on April 2 unveiled reciprocal tariffs on dozens of countries. On April 10, he raised the import fee on Chinese shipments to 145 percent. The next day, the administration announced exemptions for smartphones, computers, chips and other electronics. However, Commerce Secretary Howard Lutnick on April 13 said in an interview with CNBC that the exemptions for those electronics are temporary and that tariffs would be included in a duty on computer chips that Trump plans to impose in the next two months.

Extreme Networks, like many tech vendors and networking equipment manufacturers, is no stranger to supply chain impacts. Rice likened the current global trade dynamics to COVID-19's impact on the global supply chain, beginning in 2020, when many companies “were forced to pause to adjust to the new reality,” he said.

As a result of prior experiences, Morrisville, N.C.-based Extreme Networks has already implemented cross-functional teams to manage and mitigate the impact to its customers, he said.

“Since early November, these teams have proactively worked hand in hand with our partners, distributors and customers to provide early visibility and help plan for potential cost and supply impacts. This collaboration has been key to helping everyone stay ahead of changes and navigate broader supply chain challenges,” Rice said.

To further minimize disruption for the channel and end customers, Extreme Networks is “exploring alternative sourcing and supply routes, optimizing inventory positioning and maintaining open, transparent communication around any necessary pricing adjustments,” he said.

One large solution provider company expects to see its networking vendor partners increase prices due to impacts from the tariffs on products and components. The company “will then have no choice” but to pass cost increases on to the end customer, an executive for the organization told CRN under the condition of anonymity.

“For us, this situation creates an environment where we’re impacted just like our customers,” the executive said.

The executive said that the uncertainty is making the company “pause” some of its own 2025 investment plans until it has a better sense of the financial impact that will be brought on by the tariffs.

“Customers are definitely concerned, which translates to me being concerned too,” the executive said. “The biggest concern I have is the uncertainty, as it feels like everyone is forced to plan for the worst scenario from a budgeting perspective.”

Networking giant Cisco Systems, which was hit hard by supply chain impacts that followed the COVID pandemic, has made changes in recent years to diversify its supply chain. However, San Jose, Calif.-based Cisco, like its networking rivals, is expected to also face challenges with the new tariffs as the company relies on China and Mexico, in part, for the manufacturing of its networking gear and hardware offerings.

Cisco Chair and CEO Chuck Robbins made comments earlier this year to CNBC about the current administration possibly implementing reciprocal tariffs to address unfair treatment from certain countries while ensuring that the U.S. maintains its competitive edge in the AI race. However, the tech giant CEO has not commented publicly since the reciprocal tariffs were announced at the beginning of the month.

Cisco did not have any comment on how the new tariffs will impact its business or if the company expected price changes as a result when reached for comment by CRN.

Meanwhile, networking powerhouse Hewlett-Packard Enterprise, which also experienced significant supply chain challenges during the COVID-19 pandemic, is “closely monitoring developments in trade policies,” a spokesperson for Spring, Texas-based HPE told CRN in an email.

“HPE recognizes our customers are navigating the impacts, and we are committed to working with them and communicating transparently as the situation evolves,” the spokesperson added.

Lane Irvine, network business solutions director for Long View Systems, a Calgary, Alberta-based MSP that partners with both Cisco and HPE, called tariffs a “significant concern” that is affecting U.S. and Canadian markets.

“[Tariffs] have a massive impact on our business, both north and south of the border,” he said. “A perfect example is we had an order for $700,000 worth of laptops on the U.S. side, and we don’t know if there’s going to be tariffs on them or not, so how do you price that?”

The uncertainty around "will there or won’t there be tariffs" is already impacting budgets and causing customers to delay purchases to brace themselves for a potential recession, Irvine said.

Creating a symbiotic relationship in which there’s more production in North America, while still being able to purchase and import from other countries, is crucial, Irvine said.

“To say across the board that everything should be produced in the U.S. is not an accurate statement,” he said. “Especially as you look at electronics and the equipment that we deal with, the rare metals that are required, and some of the things around chip production, it’s not feasible in the U.S. It’s going to make way more sense to produce it outside and tariffs just don’t help that at all.”

Sunnyvale, Calif.-based Juniper Networks, which is currently embroiled in a legal battle alongside HPE versus the Justice Department as it attempts to block HPE’s $14 billion acquisition of the company, did not respond to CRN’s request for comment on how the tariff situation could impact business prior to publication.

Ericsson Enterprise Wireless, which includes the wireless edge networking portfolio from Cradlepoint via Ericsson’s acquisition of the company in 2020, is also closely monitoring tariffs rather than prematurely reacting, Matt Cook, chief sales officer, enterprise wireless, for the Boise, Idaho-based company, told CRN.

“What we don’t want to do is react too soon and just adjust pricing,” Cook said. “What we are prioritizing over everything else is, we’re going to stay close to the situation, but we want to be competitive and do the right thing for our customers.”

The enterprise wireless arm of Ericsson, which does more than 95 percent of its business through the channel, is so far not seeing a slowdown in its bookings due to tariffs, Cook said.

“At this point, we’re not reacting. We’re trying to figure out: How do we do this? And we’ve seen a couple good practices out there where it just becomes a line item—tariff—where you don’t adjust pricing, just put in a line item. But I don’t think we really know what’s going to happen yet,” he said.