Welcome to Thoughts on the Market.
I'm Michael Zezis, Morgan Stanley's Global Head of Fixed Income and Public Policy Research.
And I'm Eric Woodring, Head of the USIT hardware team.
Today, we continue our tariff coverage with a closer look at the impact on tech hardware,
products such as your smartphone, computers, and other personal devices.
It's Thursday, April 17th, at 10 a.m. in New York.
President Trump's reciprocal tariffs announcements, followed by a 90-day pause and exemptions,
have created a lot of turmoil in the tech hardware space.
People started panic buying smartphones, worried about rising costs,
only to find out that smartphones may or may not be exempted.
As I pointed out in this podcast before,
these tariffs are also significantly accelerating the transition to a multi-polar world.
This process was already well underway before President Trump's second term,
but it's gathering steam as trade pressures escalate.
Which is why I wanted to talk to you, Eric, given your expertise.
In the multi-polar world, IT hardware has followed a China plus one strategy.
What is this strategy, and does it help mitigate the impact from tariffs?
Historically, most IT hardware products have been manufactured in China.
Starting in 2018, during the first Trump administration,
there was an effort by my universe to diversify production outside of China to countries friendly with China,