Tariff Wars & Tech Supply Chains: A Strategic Wake-Up Call for IT Leaders

Summary 

IT Sourcing, Procurement, and Vendor Management leaders across Australia, New Zealand, and ASEAN must respond swiftly as global tariff wars and geopolitical shifts reshape technology supply chains, pricing, and service delivery. This article offers actionable insights and resilient sourcing strategies to maintain operational continuity. 

Findings 

1. Tariff Wars Are Redefining Price Points and Lead Times for Core IT Infrastructure: Trade tensions among economic powers (e.g., US-China, China-India, EU-Asia) are inflating costs and causing delivery delays for essential hardware, impacting downstream buyers in ANZ and Southeast Asia. 

2. Nearshoring and Regional Reconfiguration Are Gaining Ground but Bring New Risks: Enterprises are diversifying from China to Vietnam, Malaysia, and India, facing challenges around supplier maturity, logistics infrastructure, and regulatory clarity. 

3. Software, SaaS, and Services Are Quietly Being Reshaped by Geopolitics: Licensing models, SLAs, and data residency norms are evolving due to digital sovereignty policies in ASEAN and strategic recalibrations by global technology vendors. 

Recommendations 

1. Conduct a Tariff Sensitivity Assessment Across Your Vendor Portfolio: Identify suppliers and categories most exposed to existing and emerging tariff regimes. 

2. Develop a Multi-Region, Multi-Vendor Sourcing Strategy: Incorporate nearshore and regional alternatives to introduce flexibility and reduce concentration risk. 

3. Evaluate Supply Chain Resilience in Vendor Selection Criteria: Prioritise vendors with geopolitical agility, regional coverage, and strong contingency plans. 

4. Engage Risk, Legal, and Compliance Teams Early in Procurement: Address data residency, jurisdictional clauses, and compliance requirements from the start. 

5. Review and Renegotiate Software Licensing and Support Agreements: Ensure licensing terms align with current regulatory and geographic realities. 

Analysis 

1. Tariff Wars Are Reshaping Hardware Economics 

Global tariffs—especially those driven by the U.S. Section 301 tariffs and countermeasures by China—have emerged as critical disruptors for IT procurement. Over the past five years, costs for imported networking equipment, end-user computing devices, and data centre infrastructure have surged, with some categories experiencing 15–25% price hikes. 

Australia and New Zealand, heavily reliant on imports, are acutely vulnerable to these shocks. Distributors in Sydney, Auckland, and Singapore report chronic shortages and weekly pricing fluctuations. Large-scale projects in public and private sectors alike are facing ballooning budgets and extended timelines, which in turn affect downstream project delivery, especially where hardware is tightly integrated with infrastructure upgrades or end-user deployments. 

Tariff-related price hikes are compounded by shipping bottlenecks and fluctuating foreign exchange rates. For CIOs, this requires a paradigm shift: procurement can no longer be evaluated on cost alone but must incorporate risk buffers and agility. 

Recommendation: Tariff Sensitivity Assessments help quantify these vulnerabilities and pre-empt surprises. Contracts should also incorporate tariff escalation clauses and flexible pricing structures. 

2. Nearshoring: Opportunity Wrapped in Complexity 

In response to escalating tensions and over-dependence on China, organisations are diversifying their manufacturing bases. Vietnam, Malaysia, and India are popular alternatives due to their FTAs and rising manufacturing capabilities. ASEAN nations, backed by agreements like RCEP and CPTPP, have enhanced trade facilitation for IT products. 

However, this move isn't without trade-offs. Vendors in these countries often lack robust enterprise-grade credentials. Due diligence reports frequently cite immature quality controls, limited multilingual support, and compliance gaps with global frameworks such as ISO 27001 or SOC 2. 

Infrastructure also presents an issue. Logistics and last-mile delivery in second-tier cities can create inconsistencies in deployment timelines. Regulatory environments remain unpredictable, with governments changing import/export rules or tax treatments with little notice. 

Recommendation: Building a Multi-Region, Multi-Vendor sourcing model is essential. Use geopolitical risk assessments, site audits, and supplier maturity scoring models as part of your due diligence. 

Supply chain resilience evaluations—factoring in vendor disaster recovery plans, local inventory strategies, and alternative fulfillment options—should be embedded into procurement criteria. 

3. Software, SaaS, and Services Are Quietly Shifting 

Although SaaS and software solutions aren't directly hit by tariffs, their provisioning is heavily influenced by digital sovereignty and cross-border data governance laws. Jurisdictional controls across ASEAN have led to fragmented service delivery models and increased legal complexity. 

In Indonesia, data localisation requirements under GR71 require in-country data centres for certain sectors. Vietnam’s Cybersecurity Law mandates storage and inspection of user data.

Meanwhile, Singapore is tightening compliance frameworks under the PDPA. 

Global SaaS providers have responded by deploying regional instances, altering support coverage, and—in some cases—exiting certain countries. This leads to inconsistencies in SLAs and support availability. IT leaders are often unaware of backend service migrations or regional policy updates until an incident reveals gaps in coverage. 

Licensing models, too, are evolving. Vendors are issuing region-specific agreements and sometimes splitting billing structures. This undermines cost predictability and complicates license management. 

Recommendation Link: Legal and Compliance teams must now play a central role in IT vendor negotiations. Conduct joint reviews of jurisdictional clauses, dispute resolution mechanisms, and data residency implications. 

Renegotiating software and SaaS contracts to reflect regional support tiers and evolving data governance norms ensures better continuity and lowers compliance risk. 

Conclusion 

IT leaders can no longer afford to treat global trade tensions and digital policy shifts as background noise. They must recognise these forces as central drivers of how technology is procured, delivered, and consumed. In a world where tariffs can alter go-to-market timelines and data laws can reshape SaaS delivery overnight, adaptive sourcing is the new competitive edge. 

By embedding geopolitical awareness, diversified vendor strategies, and legal alignment into procurement practices, sourcing professionals can move from reactive crisis management to proactive risk navigation. 

The tech supply chain is no longer just about products and pricing—it's about foresight, flexibility, and future-proofing. 

About Sedha Consulting

Sedha Consulting is a strategic advisory and technology delivery firm that partners with IT and procurement leaders across Australia, New Zealand, and the ASEAN region. With over a decade of proven experience under the leadership of Guriq Sedha—whose background includes senior roles at Gartner and advisory engagements across APAC and global markets—Sedha brings deep expertise in IT sourcing, procurement strategy, and vendor management. We help organisations assess exposure to geopolitical and supply chain risks, identify operational gaps, and design resilient, fit-for-purpose sourcing models. Whether you're rethinking supplier diversity, renegotiating contracts, or building compliance-ready frameworks, Sedha Consulting is here to help you turn disruption into opportunity.