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- How Trump's Tariffs Are Affecting Tech
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Nintendo Switch 2 was unveiled last week but it hasn’t yet become available for sale in the US because Nintendo is still assessing the impact of tariffs imposed by the Trump administration and how they are affecting the global trade. Nintendo is not alone. Tech companies around the world have entered into a zone of uncertainty due to global trade tensions.
Markets around the world have turned red. Trump announced tariffs upwards of 30 percent on both China and Taiwan on Wednesday as part of an expansive lineup of tariffs targeting imports across the board.
All tech companies that depend on manufacturing and supply chains through China and Taiwan have been affected.
China will be hit with a 34% tariff, on top of the 20% tariffs levied on Beijing over the past two months. Taiwan faces a 32% import tax, while goods from the European Union (EU) will encounter a 20% tariff upon entry into the U.S.
Apple lost over $300 billion in the market as its supply chains were hit hard by the tariffs. About 80 percent of Apple products are made in China.
Apple has been exploring other centers for manufacturing like India and Vietnam. Unfortunately, Vietnam is also going to face one of the highest tariffs in the world - 46%. India will also face a 26% tariff.
These tariffs are going to put technology further out of reach for too many Americans. Trump has taken a sledgehammer to stable prices for smartphones, tablets, and laptops that we all use to power our lives.
Semiconductors are exempted from tariffs directly but here’s the thing - semiconductors are usually inside something that is covered by the tariffs like laptops, smartphones, etc.
A notable exception that will not be affected by American tariffs is Tesla. The electric vehicle firm produces all of its vehicles in the U.S. at factories in California and Texas. Although there are fears that companies like Tesla can be affected by retaliatory tariffs by other countries.
Apple, Microsoft, Amazon, Alphabet, Meta, Nvidia and Tesla — a group also known as the “Magnificent Seven” — collectively lost more than $1 trillion in Thursday trading on Wall Street.
The Trump administration has earlier expressed how they want to position the US as the leader in AI but recent measures have been counterproductive.
Trump last month also called on Congress to scrap the “horrible, horrible” CHIPS and Science Act, passed in 2022 under President Joe Biden. The CHIPS Act is a bipartisan law that authorized nearly $300 billion in funding to boost semiconductor research and manufacturing.
China is not backing off and has imposed retaliatory tariffs of 34% and the Chinese are showing any signs of slowing down. The country is allowing the Yuan to weaken to make their exports more attractive.
What we are seeing is a game of who can bear more pain. We've stopped talking about any sense of gain.
The problem is no one knows when these tariffs will end. There is no clear end goal announced by the US government.
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