chip industry dodges us tariffs, but stock concerns linger

2025-04-04 general

Washington, Friday, 4 April 2025.
semiconductors are exempt from president trump’s new reciprocal tariffs. experts believe this is due to the critical role they play in global supply chains. indian goods now face a 27% tariff when entering the us. despite the tariff exemption, stocks for nvidia, asml and tsmc are tumbling. experts worry about a potential collapse in demand.

trump’s tariff measures

On April 3, 2025, president Trump announced a new trade regime, imposing a 10% baseline tariff on most countries [3][5]. Higher tariffs are planned for countries with large trade deficits with the U.S., set to take effect on April 9, 2025 [3][5]. However, some goods, including semiconductors, are exempt from these reciprocal tariffs [1][3]. According to the White House, exemptions also include copper, pharmaceuticals, and lumber [1]. Trump described these measures as an ‘economic independence declaration’ and the start of a ‘golden age’ for American jobs [1][5].

market reactions and analysis

Despite the semiconductor tariff exemption, concerns persist regarding a potential demand collapse, impacting stock valuations [2]. On Wednesday, following Trump’s tariff announcements, US stock futures declined [3]. Nasdaq 100 futures fell over 3%, S&P 500 futures nearly 2%, and Dow Jones futures about 1% [3]. The tariffs’ complexity and potential for global economic disruption are causing uncertainty [4]. EU Commission President, Ursula von der Leyen, expressed regret over Trump’s decision, warning of ‘huge consequences’ for the global economy and the rise of protectionism [4].

impact on asian economies

Trump’s ‘reciprocal tariffs’ will significantly affect various Asian economies [5]. Taiwan faces a 32% tariff, leading to strong objections from the Taiwanese government [7]. Vietnam is set to be charged 46%, Cambodia 49%, Thailand 36%, India 26%, South Korea 25% and Japan 24% [3][5]. Malaysia will face a 24% tariff, although semiconductors are exempt [8]. These tariffs, responding to perceived unfair trade practices, are intended to rebalance trade relationships, though economists predict potential inflation increases of 0.5% to 1% [5].

semiconductor industry dynamics

The semiconductor industry’s exemption acknowledges its crucial role in global supply chains [1]. Ajay Srivastava, founder of GTRI, suggests India could capitalize on this by capturing parts of the semiconductor value chain, such as packaging, testing, and lower-end chip manufacturing [1]. However, the US has already imposed tariffs that have increased the tax on semiconductors to 50% [6]. Despite the current exemption, the industry remains wary of potential component tariffs and the impact of broader economic policies on demand [2][6].

Bronnen

Semiconductor Industry Tariff Exemption