The 145% U.S. tariffs on Chinese imports have sent shockwaves through the cybersecurity hardware sector. Vendors heavily reliant on Chinese manufacturing are grappling with increased costs and supply chain disruptions.

Vendor Impacts:

Independent sources are citing some interesting numbers that highlight the potential impact.

• Fortinet: With approximately 95% of its hardware manufactured in Taiwan, Fortinet faces significant exposure. Analysts estimate a potential $40 million impact due to tariffs, translating to a 60 basis point margin hit. 

• Cisco: Experiencing price hikes of 10–15% on certain products, Cisco is adjusting its supply chain and pricing strategies to mitigate tariff effects.

• Palo Alto Networks: Proactively shifting manufacturing to Texas and reducing reliance on Chinese components, Palo Alto is better positioned to weather the tariff storm. 

Strategic Considerations:

The current landscape underscores the importance of supply chain diversification and the shift towards cloud-based and subscription models. Vendors with a strong presence in these areas, like Palo Alto and Cisco, are better insulated against such geopolitical disruptions.

Conclusion:

In this volatile environment, organisations must reassess their procurement strategies, prioritising vendors with diversified manufacturing and robust cloud offerings.

At MountNex, we specialise in navigating these complexities, ensuring your technology investments are resilient and future-proof.

References:

https://www.crn.com/news/security/2025/cybersecurity-vendors-expected-to-be-resilient-amid-tariffs-analyst?utm_source=chatgpt.com

https://www.benzinga.com/25/04/44627702/fortinet-faces-tariff-turbulence-analyst-flags-margin-risk?utm_source=chatgpt.com

https://www.fool.com/earnings/call-transcripts/2025/02/13/palo-alto-networks-panw-q2-2025-earnings-call-tran/?utm_source=chatgpt.com