Menace of tariffs will loom massive amid auto, tech glitz at CES

By Abhirup Roy

SAN FRANCISCO (Reuters) – Auto and tech giants displaying off their newest improvements on the CES commerce present in Las Vegas subsequent week can anticipate a barrage of questions on a subject that’s often not central to the consumer-focused occasion: tariffs.

The gathering is among the largest of producers, analysts and suppliers in the USA and comes days earlier than the inauguration of President-elect Donald Trump, who has pledged huge tariffs on imports from Canada, Mexico, China and different U.S. buying and selling companions. This has sparked considerations about spiraling prices for companies in addition to customers. 

“This will likely be a sizzling subject,” stated technique advisor Deborah Weinswig, CEO of Coresight Analysis, who stated the proposed tariffs have come up in nearly each dialog she has had with purchasers forward of CES. “That is going to be one thing that positively senior management goes to have to handle.” 

CES 2025, previously often called the Shopper Electronics Present, runs Jan. 7-10 and is used to debut merchandise starting from new automotive expertise to quirky devices, as nicely displaying new methods to make use of synthetic intelligence. Among the many highlights this yr is a keynote speech from AI chip big Nvidia (NASDAQ:NVDA)’s celeb CEO, Jensen Huang. 

Whereas AI will nonetheless be the buzzword on the present flooring, the difficulty of tariffs will likely be top-of-mind in coverage classes, press conferences and on the sidelines. 

Firms could also be requested about altering suppliers and transferring manufacturing to the USA to mitigate supply-chain disruptions – strikes that take time and are costly, analysts have stated.  

Honda (NYSE:HMC), as an illustration, sends 80% of its Mexican output to the U.S. market. It has warned it might have to consider shifting manufacturing if the USA had been to impose everlasting tariffs on autos imported from the nation.

Almost half of recent automobiles bought within the U.S. in addition to a big share of components on the remainder are made elsewhere, in accordance with estimates from Edmunds. European and American carmakers might lose as much as 17% of their mixed annual core income if the U.S. imposes import tariffs on Europe, Mexico and Canada, in accordance with an S&P International report. 

PLANNING IN HYPER MODE

Along with tariffs, Trump has stated he plans to start rescinding insurance policies meant to advertise the adoption of EVs.

Many suppliers, already struggling due to weaker than anticipated EV demand, are working on “razor-thin” margins and must radically adapt their value construction this yr within the face of potential tariffs, stated Felix Stellmaszek, international chief of the automotive and mobility sector at Boston Consulting Group.

“Add to this supply-chain uncertainties and labor shortages and it is clear that many suppliers are in dire straits,” he stated. “The state of affairs planning is in hyper mode.” 

Between responding to potential tariffs, automakers and their suppliers – together with Honda, Toyota (NYSE:TM), Bosch (NS:BOSH), and Continental – are anticipated to offer updates on their race to develop automobiles with software-driven enhancements, self-driving expertise and AI that makes autos simpler and safer to drive.  

Among the many audio system will likely be Delta Air Traces (NYSE:DAL) CEO Ed Bastian, Volvo (OTC:VLVLY) Group CEO Martin Lundstedt, Panasonic (OTC:PCRFY) CEO Yuki Kusumi, and X Corp CEO Linda Yaccarino. Each business is more likely to face questions on tariffs. 

“‘How are corporations going to work collectively from a supply-chain perspective?” stated advisor Weinswig. “How are we going to mitigate rising prices? Can expertise resolve this? There’s nonetheless a lot that is not identified, we have seen that everybody’s attempting to determine each potential state of affairs.”