Nvidia stock sinks 4% as Trump’s tariff plans rattle AI trade
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Nvidia shares fell over 4% early Monday after US President Donald Trump delivered a stern message about trade tariffs. Trump said on Sunday that no country would be given any special treatment regarding tariffs. He also signed new trade policies into effect on April 2, which he calls “Liberation Day.” This frightened investors, who had expected a softer trade stance. Trump’s remarks set off a market-wide sell-off led by tech stocks. Shares in Tesla fell over 5%, the biggest decline for the “Magnificent Seven” tech behemoths. Already in the crosshairs of new trade restrictions, Nvidia saw its stock also tumble. New tariffs disrupt Nvidia’s role in the AI arms race An imminent 25% tariff from the US government on goods from Mexico and Canada directly impacts Nvidia. The company produces advanced graphics processing units (GPUs) in artificial intelligence (AI) servers. So, many of these AI servers are put together in Mexico and driven across the border into the US. According to trade data, the US imported $43 billion in computers, including AI servers, from Mexico in 2024. The company expects new tariffs to increase the cost of such servers, which could decrease demand for Nvidia’s AI chips. Taiwan, also a key source of Nvidia’s GPU supply, could also see the extension of trade controls. In 2024, the US imported $33 billion worth of computer parts, including Nvidia-powered printed circuit boards, from Taiwan. The tech firm’s production costs could increase if Trump hits Taiwan with more tariffs. Nvidia gears up for major changes ahead The short-term effects of the tariffs will take time to play out, but Nvidia is already looking ahead. At its latest GTC conference, CEO Jensen Huang answered questions about trade restrictions, specifying that export control restrictions concerning artificial intelligence and China were the reason behind the firm’s challenges. He acknowledged that tariffs would have “a little impact”…
Filed under: News - @ April 1, 2025 12:22 am