Shares of technology tumbled with Apple Inc. leading the charge lower. That decline came on the heels of President Donald Trump’s announcement of a barrage of new tariffs on imported goods. It included a blanket 10% tariff on foreign models and especially high duties for countries like China – a combination that reverberated throughout the market. In late trading on Wednesday, Apple’s stock tanked more than 6%. This abrupt decrease became the biggest plunge among tech firms and sounded alarm bells for investors.
Impact of Apple’s Chinese Market and Supply Chain
Also, the Chinese market and supply chain Apple relies on for most of its devices is a big downside. If the company’s postmarket loss survives into normal trading Thursday, it would be Hims & Hers’ biggest drop since September 2020. Investors are RIVEC as they look for clues for possible fallout. Though Trump has previously heaped praise on Apple’s massive other investments in American soil, the company is suffering a sharp downturn. This decline happens despite an anticipated $500 billion spend to boost domestic production.
“Apple is going to spend $500 billion, they never spent money like that here. They’re going to build their plants here.” – Donald Trump
Yet the tech titan was by no means atypical in its travails. Plenty of other big-hitters like Nvidia and Tesla took the same kind of beating. Nvidia’s shares dropped about 4% in afterhours trading. The company, which manufactures chips in Taiwan and assembles its systems in Mexico, faces potential repercussions from the new tariffs. Likewise, Tesla, the electric vehicle maker, dropped 4.5% in late trading.
Impact on the Nasdaq and Broader Market
This new slump comes on the heels of a brutal first quarter for the Nasdaq, as that index plummeted 10%. After a rough end to 2022, the index appeared to be on the mend, gaining ground during the first two days of the second quarter. The tariff announcement killed that momentum.
Trump’s tariffs targeted some countries more directly — going after them with high rates. China, which has a 34% tariff on imports, European countries with a rate of 20%, and Japan a 24% tariff. This assertive trade policy intends to set the terms of trade and create a new paradigm in international trade.
“We will supercharge our domestic industrial base, we will pry open foreign markets and break down foreign trade barriers.” – Donald Trump
The market has already begun to respond accordingly. Overall, analysts may have different views on what the effects of this will be on tech stocks and the economy in the long run. Apple’s leadership position in the declining market may force changes in strategy and operations among other tech companies reliant on international supply chains.
What The Author Thinks
The tariff announcement has sent shockwaves through the tech industry, with Apple at the forefront of the stock decline. While the new trade policy may be aimed at reshaping global trade, the immediate impact on companies reliant on international supply chains is undeniable. This could lead to a significant shift in the strategies of major tech players, particularly those like Apple, Nvidia, and Tesla, that are deeply embedded in global manufacturing networks.
Featured image credit: Kwiser97 via GoodFon
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