The ripple effects of new US tariffs on the Data Center supply chain

Data center construction faces renewed uncertainty as new US tariffs on imported construction materials and technology equipment signal fresh protectionism.

Despite a 90‑day reprieve, the universal 10% tariff is expected to inflate steel, copper, electrical and key IT hardware costs, adding to existing supply‑chain strain.

The full impact remains unclear; tariffs on Chinese goods have meanwhile been lifted to 125% following Beijing’s 84% retaliation, introducing further volatility.

To help clients navigate this landscape, Linesight has prepared this briefing, outlining likely cost and programme impacts and recommending mitigation strategies for data‑center schemes.

Core issues are summarised below; download our latest report for deeper analysis.

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Supply chain adjustments

Operators are accelerating localisation, vendor diversification and tariff‑exempt sourcing, yet even 'domestic' products rely on global sub‑components. A comprehensive bill‑of‑materials review would be time‑consuming and quickly outdated in today’s shifting landscape.

Rising material costs

Tariff‑driven increases in steel, copper and equipment prices are forcing developers to revisit budgets for upcoming data‑centre builds. Diversifying suppliers, partnering with domestic manufacturers and pre‑purchasing long‑lead items can help limit exposure.

Mitigation strategies

Reassessing supply chains, favouring domestic sources and adopting modular construction are the most practical near‑term defences. Over time, these steps should foster a more resilient and regionally anchored industry.

Tariffs pressure equipment supply

Servers, networking gear, switchgear and cooling systems—all heavy on foreign content—face tariff‑related cost and schedule risks. Prolonged US‑China tensions could reroute Chinese exports to the EU and UAE, easing prices there but adding new volatility.

Opportunities for Middle East buyers

With US demand cooling, Turkish, European and Chinese steel mills are redirecting exports to the Middle East and Asia, creating potential oversupply. This could translate into short‑term price relief on core commodities despite broader market turbulence.

How will US tariffs affect data centre supply chains?

Read Linesight's latest report to learn more.

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