Trump’s tariffs could set US tech industry back 10 years

The stock markets have been through crisis moments under Trump’s governance. He hasn’t shown much concern. Wedbush analyst Dan Ives says that the latest round of retaliatory tariffs stands out because it could hurt the US in the race to be the leader in AI. Will Trump and America handle that?

According to Ives , “The concept of taking the U.S. back to the 1980′s ‘manufacturing days’ with these tariffs is a bad science experiment that in the process will cause an economic Armageddon in our view and crush the tech trade, AI Revolution theme and overall industry in the process.” 

This is how. The tariffs that the Trump administration put on some of the most important parts of tech supply chains—50% tariffs on China, 32% tariffs on goods from Taiwan, and 46% duties on Vietnam.

In addition, iPhones made in the US would cost $3,500 instead of $1,000 compared to iPhones made in China, Vietnam, and India. Of course, this will affect the US market. Ives also said that prices for a wide range of electronics will go up by 40% to 50% for buyers. 

Dark days are ahead for tech- Dan Ives 

According to Ives, the economic pain that these tariffs will bring is hard to describe and can essentially take the U.S. tech industry back a decade while China steamrolls ahead.

China is already competing with the US, especially with DeepSeek, which achieved what the AI companies couldn’t. In fact, Nvidia’s chips are the only thing that is stopping China from completely overtaking the US.

Now, the AI Revolution trade would be significantly slowed down by these head-scratching tariffs that require negotiation at realistic levels.

Ives added that “near-term pain may extend much longer due to the time required to build manufacturing sites in the US. Not to forget to transition the workforce with the necessary skills. This, too, requires time.” 

Even though time is available, the cost of labor in the US makes it impossible to ever have semi-fabs on a large scale. This means at the rate they are now, tariffs could cut tech earnings by at least 15%,

Ives said, “We assume tariff negotiations start now; otherwise, dark days are ahead for tech… And U.S. consumers pay the price for this… Not a debate.”  Meanwhile, the tariff war continues. In fact, less than an hour before Ives’ note, news spread that China would retaliate by putting 34% tariffs on US goods.

US markets are in red after China’s retaliatory tariffs

US tech stocks fell early Friday, making it one of the worst days for the Nasdaq in five years. Also, 16 other companies were put under export controls. This means that shipments of so-called “dual-use” items will be stopped. These are items that have parts made in China but are made or put together outside of China.

Apple shares fell about $330 billion in value yesterday, which was the biggest drop in market value in a single day. They fell another 4% in premarket trading, indicating that they will open at $194.88 each.

Apple makes about a fifth of its revenue in China, but what’s more important is that it depends on China for its manufacturing base and supply chain connections.

Tesla’s stock also saw a decline of 5.23%. It is now sitting at  $253.39. China is a big part of Tesla’s Asian manufacturing base. In addition, a quarter and a third of all its electric vehicles are sold there.

On the other hand, Nvidia shares fell 3.6% to $98.15 each. Of course, investors have become worried about the company’s ability to sell high-end and mid-range chips in China.

During its fiscal third quarter, which ended in October, Nvidia made about $5.4 billion in sales in China. Another $5.15 billion came from customers and clients in Taiwan. Together, they were responsible for about 30% of the group’s $35.1 billion total. America’s companies are receiving the biggest hit.

Peter Schiff, the gold evangelist, said , “It is interesting that global markets have been far more negatively impacted by China’s tariffs on the U.S. than they were by the U.S. tariffs on the world.” He added that this further evidences the increasing significance of China’s economy and the decreasing importance of the US.

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