Sweeping tariffs unveiled by US president Donald Trump on Wednesday will have ripple effects across the tech industry, according to experts who study global trade. The measures, which include a minimum 10 percent tariff on most countries and steep new import duties on key US trading allies like Europe, China, Vietnam, India, and South Korea, sent stocks nosediving in after-hours trading.
Meta and Nvidia stock prices each fell by around 5 percent, CNBC reported, while Apple and Amazon fell around 6 percent. The iPhone maker earns roughly half its revenue by selling phones that are manufactured in China and India, while some of its other products are manufactured in Vietnam. Amazon’s online shopping marketplace is similarly heavily dependent on goods sold by third-party merchants in China.
These market dips may be just the beginning. Many economists warn that the White House has set in motion one of the largest shifts in global trade in decades, and among the results could be higher prices for US consumers and more inflation. Earlier this week, Goldman Sachs raised the probability of a US recession in the next 12 months to 35 percent, up from 20 percent.
“There’s this idea that consumers are willing to pay higher prices for American goods,” says Tibor Besedes, a trade expert and professor at the School of Economics at the Georgia Institute of Technology. “There’s no evidence of that ever taking place.”
Besedes adds that one reason Americans said they voted for Trump was because they were displeased with inflation during the Biden administration, and he can’t imagine they’ll be happy about prices potentially rising now.
Some of the new country-specific tariffs, such as those levied on the United Kingdom, Chile, and Brazil, are relatively low. Others, such as those levied on China, Cambodia, Vietnam, Taiwan, India, and Thailand, are much higher, ranging from 26 percent to 49 percent. (Trump even targeted islands that aren’t independent countries, some with no exports or human inhabitants.)
For now, at least, Trump has given an exemption to one crucial category of tech imports: semiconductors. That means US companies like Nvidia, which puts advanced chips made by Taiwan Semiconductor Manufacturing Company (TSMC) inside their AI graphics processing units, won’t have to pay the 32 percent tariffs Trump imposed on Taiwan. It’s not immediately clear, however, if TSMC would still be subject to the blanket 10 percent tariff Trump also announced. Overall, about 44 percent of logic chips imported to the US come from Taiwan, according to one estimate.
Within the tech sector, Trump’s tariffs could deal perhaps the biggest blow to ecommerce. “Online retailers will feel the pain, and so will consumer device brands,” says Ian Bremmer, a political scientist and the founder and president of the consulting firm Eurasia Group.
In addition to introducing sweeping tariffs, Trump signed an executive order on Wednesday ending a trade loophole for packages from China and Hong Kong that allows American consumers to directly import goods to the US valued under $800 without paying anything.
