How will tariffs affect Garmin? Price increases, payment functions?

The main companies in the cycling market continue to make estimates about the impact that the tariffs established by Donald Trump on imports, especially those from China, can have. The latest to express their concerns has been the American company Garmin, heavily dependent on Asian components used in the manufacturing of their devices.

Garmin estimates that Trump's tariffs will cost them $100 million

Despite a 2024 in which the company experienced significant growth and a first quarter with record revenues of over $1.5 billion, concern is growing within Garmin. The reason could not be other than the impact of the tariffs dictated by Donald Trump, which, according to initial calculations, will result in a cost increase for the company of over $100 million as expressed by Garmin's CEO Cliff Pemble.

The problem for Garmin is that approximately a quarter of the company's revenues come from products manufactured outside the United States, mainly produced in Taiwan. Products that, of course, will now be affected by the tariffs. On the other hand, the fall in the value of the dollar may mitigate this impact as a large part of the company's revenues are generated in currencies other than the dollar.

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It remains to be seen whether this can offset the additional costs generated by the tariffs, in which case Garmin would not be forced to pass on these extra expenses to the price of their products, something that benefits the American company as an increase in prices would likely affect demand for their products.

In any case, Garmin continues to explore new revenue streams such as the recently introduced Connect+ which adds a paid subscription with extra features to their Garmin Connect app. Following the positive reception of Connect+, Cliff Pemble states that it is a path to continue advancing in the future with the addition of more and more features similar to how the popular sports social network Strava has been doing.