Echoing the lessons learned from the pandemic and demonstrating strategic resilience, Cisco and HPE prepare for changing U.S. tech tariffs by diversifying their supply chains.

Despite a brief respite, the increasing turmoil surrounding technology tariffs has executives and industry watchers perplexed about the potential effects of those changes on demand, operations, and finances. Many are throwing up their hands over the timing and scope of any change.

Questions on the potential effects of tariffs on vendor executives' operations have been especially common, and many of their replies have highlighted general uncertainty supported by a stubborn degree of optimism.

Cisco CFO Scott Herren stated during the company's most recent earnings call that although this is a dynamic environment, they have spent a lot of time preparing for it. They have done this by utilizing the flexibility and agility they have incorporated into their operations over the past few years, as well as the strength of their best-in-class global supply chain team. As soon as tariffs are implemented, they are ready to take steps to lessen the effects. He believes that the current situation is quite flexible. It's quite hard to predict what will happen in reality.

During the vendor's most recent earnings call, Antonio Neri, CEO of Hewlett Packard Enterprise (HPE), echoed this sentiment by telling investors that HPE had been analyzing a variety of scenarios and mitigation strategies since December to determine the potential net impact. However, he also added that, pending additional announcements from the U.S. administration, their outlook for the remainder of the year represents their best estimate of the net impact from this tariff policy.

Both did highlight the actions each vendor has done to lessen the effects of tariffs, such as relying on supply networks that are more diverse. This diversity, according to analysts, directly relates to the lessons discovered during the COVID-19 epidemic.

Assuming that the tax will now be more severe for China, Sameh Boujelbene, vice president at Dell'Oro Group, told SDxCentral that whoever increased their diversity outside of China would be in a better position than everyone else. Some merchants could benefit from that.