Trump Imposes Comprehensive Tariffs, Causing Sharp Increase in Cost Pressure

With the implementation of the new round of tariff policies by the Trump administration, market analysis agencies are intensifying their evaluation of their impact on various sub sectors. Although the specific implementation details and exemption clauses for key components such as semiconductors are not yet clear, the industry impact has begun to emerge.

New Street research analyst Jonathan Chaplin pointed out in a research report released on April 4th that the wireless communication field is at the forefront. The capital expenditures of operators such as AT&T, Verizon, and T-Mobile may increase by about 7% as a result. This tariff policy includes a unified 10% benchmark tariff on goods imported to the United States, as well as higher tariffs on products from specific regions such as China and the European Union.

Jonathan Chaplin admitted that predicting the upgrade of cable TV networks is difficult, mainly due to the unclear proportion of domestic and foreign equipment suppliers. According to its calculations, about two-thirds of the expenditure in this field is related to equipment, with imported equipment accounting for two-thirds, which is expected to push up the related budget by 9%. He believes that operators are more likely to choose to postpone network upgrade projects rather than increase investment, which will have an impact on equipment manufacturers betting on DOCSIS 4.0 technology upgrades.

Specific data shows that Charter Communications network upgrades account for 12% of capital expenditures, Comcast accounts for 23%, and Altice USA accounts for 4%. Vecima Networks, a Canadian equipment company, has started adjusting its layout and transferring some production capacity to the United States to cope with risks. About half of its sales to the United States may be affected by tariffs.

Despite facing challenges, Brandon Nispel, a market analyst at KeyBanc Capital, pointed out that cable operators are in a relatively advantageous position. As a core business, broadband services, combined with the bundling strategy of discounted mobile services, will enhance their risk resistance capabilities.

In terms of fiber deployment costs, Chaplin expects a 2% increase in single point coverage costs, rising from approximately $1200 to $1225; The cost of user access has increased by 2% to $715, while the cost of other supporting equipment may increase by up to 5%. Similar to the upgrade of hybrid fiber coaxial (HFC) networks, the deployment progress of fiber optic may also slow down due to cost pressures.

According to the latest data from PwC, the annual tariff burden on the technology, media, and communication (TMT) industry is expected to surge from $13 billion to $139 billion before the introduction of tariff policies. Dallas Dolen, the head of the TMT project at the agency, pointed out that with the announcement of the details this week, the actual number may double again, but the exemption situation for key components such as semiconductors still needs to be observed.

“Previously, there was little consideration for equivalent tariff factors in predictions, “Dallas Dolen said.” The current impact is highly dynamic, and the potential impact is staggering. The initial market response will be full of emotional fluctuations, and uncertainty has reached unprecedented levels.”