CES 2025: Tariffs Take Center Stage

By Abhirup Roy

SAN FRANCISCO (Reuters) – Auto and tech giants showcasing their newest innovations at the CES trade show in Las Vegas next week will encounter numerous inquiries about tariffs, a topic usually sidelined at this consumer-focused event.

The gathering, known as the Consumer Electronics Show, is one of the largest assemblies of manufacturers, analysts, and suppliers in the U.S. and occurs just days before the inauguration of President-elect Donald Trump. He has promised significant tariffs on imports from Canada, Mexico, China, and other trading partners, raising concerns about escalating costs for businesses and consumers.

> “This will be a hot topic,” stated Deborah Weinswig, CEO of Coresight Research, noting that tariffs have surfaced in nearly every discussion with clients leading up to CES. “Senior leadership will definitely need to address this.”

CES 2025 runs from January 7-10 and is a platform for unveiling products, from new automotive technology to quirky gadgets, alongside innovations in artificial intelligence. Keynote speeches include NVIDIA CEO Jensen Huang.

While AI remains a focal point on the show floor, tariffs are anticipated to dominate policy discussions, press conferences, and informal conversations.

Companies may face questions regarding supplier changes and relocating production to the U.S. to ease supply-chain challenges, a process that is both time-consuming and costly. For example, Honda ships 80% of its Mexican production to the U.S. market and has indicated it may need to consider relocating production if permanent tariffs on vehicles imported from Mexico are enacted.

Currently, nearly half of new cars sold in the U.S. are manufactured abroad, as are a significant portion of auto parts. An S&P Global report warns that European and American automakers could see a loss of up to 17% of their combined annual core profits if tariffs are imposed on imports from Europe, Mexico, and Canada.

PLANNING IN HYPER MODE

In addition to tariffs, Trump is expected to roll back policies promoting electric vehicle (EV) adoption. Many suppliers, facing weak EV demand, are operating with minimal margins and will need to drastically adjust their cost structures this year amid possible tariffs, according to Felix Stellmaszek, a leader in the automotive and mobility sector at the Boston Consulting Group.

> “Given the uncertainties in the supply chain and labor shortages, many suppliers find themselves in precarious situations,” Stellmaszek adds. “Scenario planning is in hyper mode.”

As they prepare for potential tariffs, automakers and suppliers, including Honda, Toyota, Bosch, and Continental, are expected to update their strategies to enhance vehicles with software-driven features, self-driving technology, and AI innovations.

Notable speakers at the event will include Delta Air Lines CEO Ed Bastian, Volvo Group CEO Martin Lundstedt, Panasonic CEO Yuki Kusumi, and X Corp CEO Linda Yaccarino. Every industry represented is likely to face questions regarding tariffs.

> “How will companies collaborate on supply-chain issues? How will we manage rising costs? Can technology provide solutions? There are still many unknowns as companies strive to navigate every possible scenario,” Weinswig concluded.