AI Servers and Tariffs: Concerns Overstated, Impact Likely Limited

I have covered this topics with brief anlaysis on topics few weeks ago but thought will be great to share with people here in case you missed it

U.S. Server Imports by Country from 2019 to 2024

Mexico’s share of U.S. server imports declined from 80% in 2019 to 67% in 2024. This figure may rebound in the coming years due to U.S. tariffs on China and the advantages provided by the USMCA.

Taiwan’s share rose from 10% in 2019 to 26% in 2024—reflecting its growing role in the server supply chain amid rising demand for AI servers. Combined, imports from Mexico and Taiwan now account for over 90% of total U.S. server imports. In fact, it has been about 90% over the past 5 years. The remaining 5–10% is distributed among China, Thailand, Malaysia, Vietnam, and other countries, with a projected 5% share in 2025.

As previously discussed, once the 90-day pause ends, tariffs on Taiwan could place some pressure on server imports. However, the impact is likely to be limited, given the expected increase in production capacity in Mexico and the potential reduction in Taiwan’s capacity as supply chains and production are realigned.