Tariff Concerns Overshadow Tech and Auto Innovation at CES 2025

As CES 2025, one of the largest tech and auto trade shows, prepares to open in Las Vegas from January 7 to 10, an unusual topic is dominating discussions: tariffs. With President-elect Donald Trump’s inauguration days away and his proposed tariffs on imports from countries like Canada, Mexico, and China looming large, attendees are bracing for tough questions about potential economic fallout.

The trade show, known for unveiling cutting-edge automotive technology, quirky gadgets, and advancements in artificial intelligence (AI), is now becoming a platform to address the cost challenges posed by tariff threats. Strategy consultant Deborah Weinswig, CEO of Coresight Research, noted that the issue has surfaced in nearly every pre-CES conversation with clients.

Tariffs and Supply Chains in the Spotlight

Companies showcasing their latest innovations are likely to face scrutiny over their supply chains and manufacturing processes. Analysts predict questions about whether businesses are considering moving production to the U.S. to mitigate tariff impacts—an expensive and time-intensive solution.

For instance, Honda, which sends 80% of its Mexican vehicle output to the U.S., has already warned it may need to shift production if permanent tariffs are imposed. According to Edmunds, nearly half of new cars sold in the U.S. are made abroad, along with a substantial share of parts in domestically assembled vehicles. S&P Global estimates that European and American automakers could lose up to 17% of their combined annual core profits if tariffs are levied on imports from Europe, Mexico, and Canada.

Economic Strain on the Auto Industry

In addition to tariff concerns, the auto industry faces challenges from weaker-than-expected demand for electric vehicles (EVs). Trump’s plans to roll back policies promoting EV adoption further compound the difficulties. Felix Stellmaszek, an automotive expert at Boston Consulting Group, emphasized the precarious position of suppliers operating on razor-thin margins. The combination of tariffs, supply-chain uncertainties, and labor shortages has pushed companies into “hyper mode” for scenario planning.

Focus on Tech and AI Innovations

Despite economic uncertainties, CES 2025 remains a showcase for advancements in AI, self-driving technology, and software-driven automotive enhancements. Keynote speakers, including Nvidia CEO Jensen Huang and Volvo Group CEO Martin Lundstedt, are expected to unveil innovations that aim to make vehicles smarter, safer, and more efficient.

However, discussions surrounding tariffs are expected to dominate policy sessions, press conferences, and informal talks. Industry leaders such as Toyota, Bosch, and Continental are also expected to provide updates on how they are adapting to rising costs and preparing for potential policy shifts.

A Complex Outlook

The intersection of technology and economic policy is shaping CES 2025 in unprecedented ways. Questions remain about how companies can collaborate across supply chains, mitigate rising costs, and leverage technology to navigate uncertainty. “There’s still so much that’s unknown,” Weinswig remarked. “Everyone is trying to figure out every possible scenario.”