President Donald Trump's recent announcement of sweeping tariffs, including a 10% baseline tariff on all imports and higher, country-specific rates on nations like China and Taiwan, is poised to create significant challenges for many industries. Garmin, a global leader in GPS navigation and wearable technology, is one of the companies likely to feel the effects. This article explores how the new trade policies could affect Garmin's operations, supply chain, pricing strategies, and overall business.
Overview of Trump's Tariffs
On April 2, 2025, Trump unveiled what he called "reciprocal tariffs" under the banner of "Liberation Day." These include a 10% blanket tariff on all imported goods, with steeper rates for certain countries—34% for China and 32% for Taiwan among them. Technology and electronics are among the sectors most directly impacted.
While the administration argues the tariffs will stimulate domestic manufacturing, critics warn of increased inflation, global trade disruptions, and added pressure on American consumers and businesses alike.
Garmin’s Global Supply Chain at Risk
Garmin's business model relies on vertical integration, allowing it to control much of its production process. A key part of this model involves overseas manufacturing—primarily in Taiwan and China. With those regions now subject to high tariffs, Garmin's cost structure faces immediate and significant strain.
Taiwan, home to a large share of Garmin’s manufacturing operations, is now subject to a 32% tariff. China, where some components and production still take place, faces combined tariffs exceeding 60%. That leaves Garmin with limited flexibility in its current supply chain setup.
How Tariffs Could Impact Garmin
Rising Production Costs
The most immediate consequence of the tariffs is a spike in manufacturing costs. Components and finished products imported from Taiwan and China will now be significantly more expensive. Garmin must decide whether to absorb these costs or shift the burden to consumers.
Higher Prices for Consumers
If Garmin chooses to pass costs along, consumers could soon see price hikes across its product range—from fitness trackers to marine navigation systems. In a market where devices like the Forerunner and Fenix already carry premium price tags, even a 10–15% increase could impact buying decisions.
Supply Chain Disruption
Garmin has previously announced plans to diversify production by expanding facilities in Southeast Asia. However, these won't be operational until at least 2026. In the meantime, the company may struggle with rerouting logistics and managing supplier relationships under the new tariff regime.
Competitive Pressure
Garmin risks losing market share to competitors that are less exposed to tariffs or manufacture in countries not targeted by the U.S. For example, brands like Suunto and Polar could benefit if they’re able to maintain lower pricing.
Inflationary Ripple Effects
Broader inflation is another factor. If consumers are already feeling economic pressure from price increases in food, fuel, and other categories, a price hike on wearables could significantly dampen demand for Garmin’s products.
Garmin’s Strategic Options
Diversify Manufacturing
Garmin may accelerate plans to move production to lower-tariff countries. This process, however, takes time and may not offer immediate relief.
Absorb Some Costs
In segments where competition is fierce—like mid-tier smartwatches—Garmin may absorb a portion of the tariff impact to maintain its pricing edge. This approach, however, risks narrowing margins.
Expand U.S. Production
Garmin already has manufacturing capabilities in the United States. Expanding these facilities could help dodge tariffs entirely, but would require a long-term investment and potentially increase labor costs.
Lobby for Exemptions
Garmin may follow the lead of other tech companies by lobbying the U.S. government for product-specific or component-specific tariff exemptions.
Focus on Premium Features
By continuing to innovate and add advanced features to its products, Garmin could maintain pricing power and justify any increases to consumers.
Wider Industry Impact
Garmin is far from alone. Tech giants like Apple and Amazon are also navigating similar tariff-related challenges. Industry-wide, we may see:
- A slowdown in innovation as R&D budgets tighten
- Shifted release timelines for new products
- Increased consumer hesitation on upgrades
The ripple effects could be significant across the broader tech economy.
Conclusion
Trump’s new tariff strategy presents real challenges for Garmin, threatening to drive up production costs and disrupt carefully optimized supply chains. In the short term, consumers could see noticeable price hikes on Garmin’s most popular devices. In the long term, the company must adapt by diversifying production, investing in domestic facilities, or finding new ways to deliver value.
Garmin has built a strong reputation in the fitness and outdoor tech market. How it navigates this turbulent policy shift may define its trajectory for years to come.