The U.S. technology sector is facing mounting credit pressures despite a temporary 90-day tariff relief on key tech imports, according to a new report from S&P Global Ratings.

The reprieve, which covers products such as PCs, smartphones and core IT hardware, offers short-term relief but fails to ease broader uncertainty about future tariff rates and timing, the firm said.

In the report, Tariff Uncertainty Will Weigh On U.S. Tech Credit Outlooks, S&P Global forecasts global IT spending growth to slow to 5% to 7% in 2025, down from a previous projection of 9%.

“We expect revenue and margin headwinds throughout 2025 for our rated hardware and semiconductor issuers as they wrestle with tariff-induced demand destruction and margin compression,” said credit analyst Andrew Chang.

Even if tariffs are ultimately reduced, downgrade risks are rising, the report said. In March, negative rating actions in the U.S. tech sector outnumbered positives by 5 to 2, reversing a positive trend that began in mid-2024.

“We have not yet taken rating actions directly related to tariff announcements because of potential mitigants within the supply chain, cushion within ratings, uncertainty around the permanence of the proposed tariffs, and the potential for a more permanent technology-specific exemption,” Chang said.

S&P Global is also monitoring broader macroeconomic risks that could hit credit quality.

“We will continue to review our rated issuers and could lower ratings on those with little to no cushion at the current ratings or those dependent on a positive operating environment to improve credit metrics,” said analyst David Tsui.

Sectors most exposed include PCs and smartphones, while companies focused on servers, storage and networking hardware may be less affected. Semiconductor imports are currently exempt but could face tariffs in the near future. Software remains tariff-free, though economic weakness may dampen revenue growth.

The full report is available to RatingsDirect subscribers at www.capitaliq.com.