Markets are reeling. Wall Street just lost $5 trillion in two days, its worst week since 2020.
The S&P 500 plunged 6% on April 5. The Dow dropped more than 2,200 points, and the Nasdaq slid into bear market territory. Asia and Europe markets followed on Monday.
This downturn follows the Trump administration’s April 2 announcement of broad new tariffs on imports from 180 countries, including China, the European Union, Japan, and Vietnam.
While headlines focus on the immediate selloff, the broader implications, especially for the software industry, demand attention.
This article unpacks how the April 2025 tariffs could reshape software buying and selling — and what vendors and buyers need to do next.
Before examining how tariffs reshaped the software industry, let’s briefly recap the key trade policies that set these changes in motion.
Source: UN
According to the Peterson Institute for International Economics, the average US tariff on Chinese goods was 19.3% by February 2020, over six times higher than in January 2018, affecting about $335 billion in trade (based on 2017 import levels).
Although these trade policies initially targeted physical goods, they accelerated several major business transformations, such as:
On April 2, 2025, President Trump announced sweeping new tariffs: a 10% baseline on nearly all imports, with higher rates on goods from China, the EU, Japan, and Vietnam. The new tariffs will be rolled out between April 5 and April 9.
Here’s a closer look at the full timeline of key tariff actions in 2025:
- Feb 1, 2025: President Trump orders new tariffs:
- April 2, 2025: President Trump announces a 10% universal tariff on nearly all imports from 180+ countries to revive U.S. manufacturing and reduce trade deficits. Additional country-specific tariffs were also introduced, including:
- April 5, 2025: Universal 10% tariff takes effect
- April 9, 2025: Country-specific tariffs begin
At first glance, software may seem immune to global trade policy. It’s code, not cargo, and digital goods aren’t directly taxed under the new tariffs. But that doesn’t mean the software industry is unaffected.
Behind every SaaS product is a deeply interconnected system of cloud infrastructure, semiconductors, globally distributed teams, and region-specific pricing. Software may be digital — but its foundation is very much physical.
That’s why the April 2 tariffs are more than a manufacturing story.
By targeting 180 countries — including key tech hubs like China, Vietnam, Japan, and the EU — these trade actions are reshaping the ecosystem that powers software. The infrastructure, people, and partnerships behind it all could get more expensive, more complex, or both.
The consequences of these tariffs are compounding fast.
According to JPMorgan, the risk of a global recession has climbed to 60% following the tariff rollout. Analysts warn that rising import costs could soon impact everything from food to enterprise tech, as input prices squeeze company margins and force budget cuts.
Recent modeling published in The Conversation estimates that the new tariffs could shrink US GDP by between $149.3 billion and $438.4 billion — with the higher-end estimate representing a 1.45% decline.
IDC echoes this growing concern in tech, halving the projected global IT spending growth from 10% to around 5% in 2025.
“The wave of new tariffs introduced by the US administration will drive up technology prices, disrupt supply chains, and weaken global IT spending in 2025,” the research firm wrote in its report.
It’s the classic trickle-down effect: tariffs hit physical goods, triggering supply chain disruptions, inflated costs, and growing uncertainty. In turn, businesses start cutting budgets, reprioritizing vendors, and delaying purchases — all of which directly affect what software they need and how they buy it.
The result?
The software industry will be under pressure to do more: help businesses stay agile, manage risk, and operate across borders — all while navigating changing infrastructure costs and shifting procurement expectations.
”There’s also an indirect negative impact of tariffs on software and services, where the provider delivering the software and/or services will incur increased costs for the infrastructure to develop and deliver the product, meaning that many software and services vendors will need to include increased costs in their own pricing assumptions.”
Stephen Minton
Program Vice President, Customer Insights & Analysis, IDC
Vendors may be forced to adjust pricing models, revisit infrastructure decisions, or restructure delivery teams. Buyers might see this reflected in tighter discount windows, mid-contract adjustments, or shifting renewal terms.
The pressure is on software not just to deliver features but to help businesses stay resilient across borders, currencies, and crises.
Bottom line: The initial tariffs had fundamentally changed the tech world, and we're still feeling the effects. From infrastructure costs to pricing models, those shifts continue to influence how software is built, delivered, and bought in 2025.
With the fingerprints of these trade policies all over the tech industry, let’s look at what software vendors have to face.
Software vendors who understand the changes brought on by these tariffs can position their products more effectively and build stronger relationships with buyers navigating this new environment.
Here are the key factors that can shape software purchasing decisions in 2025:
Many businesses have permanently expanded beyond China, creating more complex, multi-region operations.
Buyers may now prioritize vendors that align with their new geographic realities, specifically looking for:
G2's 2024 Buyer Behavior Report found that 52% of buyers expect their software spending to increase in 2025. However, the report that surveyed nearly 2,000 B2B software buyers highlighted the challenge of finding locally relevant content:
As companies adjust to new global footprints and increase their software spending, demand will shift towards tools that can keep up with the challenges of operating internationally.
Higher costs in materials and logistics have made businesses more selective with their software spending. With ongoing margin pressure affecting procurement decisions, vendors should be prepared to:
G2's research confirms this trend toward greater cost scrutiny.
G2’s report found that 41% of buyers identified C-suite employees or the CFO as ultimately responsible for signing off on purchase decisions. Furthermore, 79% of respondents indicated that the CFO always or frequently holds final decision-making power in software selection.
This financial oversight means vendors must be prepared to quantify ROI more precisely than before, with 57% of buyers expecting to see positive ROI within just three months of purchase.
Organizations could now prioritize software that helps them navigate global risk and uncertainty. Vendors must position their products as solutions that reduce global risk exposure and provide the transparency needed to operate in a complex trade environment.
Tools offering these capabilities might see dramatic adoption increases:
This shift is supported by G2 data, which shows a 306% increase in monthly total traffic to the Supply Chain & Logistics category from February to March 2025, and a 199% increase compared to March 2024. Monthly traffic to the Distribution Software category rose 30% from February to March.
The demand for better visibility extends beyond supply chain applications.
G2's findings indicate that buyers across all software categories are increasingly looking for AI capabilities that can provide actionable insights and help with disruptions.
With 94% of respondents using AI software for at least one business function and “improving overall efficiency” ranking as the top use case across business sizes, the ability to provide cross-border visibility and scenario planning has become essential for software vendors in 2025.
Trade policies continue to evolve, potentially affecting software companies in several ways. To mitigate risks, vendors should:
Of course, these industry shifts don't just impact sellers, they’re changing the game for buyers too. Let’s look at what it means to be a smart buyer in today’s market.
Buying software in 2025 comes with new challenges that weren't as common before.
Let’s examine the most important things to consider so you can make better choices and avoid problems down the road.
A vendor's geographic distribution directly impacts their ability to provide consistent service and pricing. Before committing to a software provider, ask:
When selecting software partners, G2's research highlights that buyers increasingly value transparency and peer validation. The 2024 report found that 31% of buyers first consult public product review websites when planning purchases, up from 23% in 2023. Additionally, 81% of buyers consider a vendor's history with security incidents and data breaches during evaluation.
To mitigate risk in an evolving trade landscape, buyers must ask potential vendors the above questions.
As companies operate across more regions, they need tools that simplify regulatory complexity. Priority capabilities to consider include:
Even teams not directly involved in supply chain management may require better visibility into tariff-related expenses through enterprise resource planning (ERP), spend management, or procurement tools.
Beyond features and pricing, buyers increasingly evaluate vendors on their ability to withstand external disruptions. Look for software partners with:
In a volatile environment with shifting tariffs, rising infrastructure costs, and potential vendor-side pricing adjustments, buyers need more flexibility in their software contracts.
Consider asking:
Software vendors may pass rising infrastructure costs into pricing assumptions. Buyers should be proactive in negotiating terms that protect against unexpected spikes or service disruptions.
The global trade landscape remains fluid, and software is no longer insulated from its effects.
While specific tariffs may evolve, the broader trend toward greater geopolitical complexity in business operations is likely to continue.
Whether you're building software or buying it, understanding these dynamics is essential for making informed decisions in 2025 and beyond.
Tariffs shift the landscape. G2 helps you navigate it. Compare vendors, explore verified reviews, and track real-time trends in software ROIs on G2.
This article is co-authored by Shanti S Nair
Edited by Supanna Das
This article provides general information and does not constitute legal, tax, or business advice. Companies should consult with appropriate professionals regarding specific situations.
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