Nvidia stock drops amid fears over Trump's new tariff plans
Nvidia (NVDA) stock fell as much as 4% in premarket trading on Monday after US President Donald Trump confirmed that no countries would receive softer treatment when it comes to reciprocal tariffs.
Speaking aboard Air Force One on Sunday, Trump stated that tariffs set to be announced on April 2, referred to as “Liberation Day,” would target all countries, dashing investor hopes for a less aggressive trade policy and raising concerns about a potential recession, News.Az reports, citing foreign media.
Trump's latest comments spurred a sell-off across markets, with US tech stocks leading the way lower and shares of Tesla (TSLA), down over 5%, pacing losses among the "Magnificent Seven" tech stocks.
Nvidia was already set to feel an impact from Trump’s tariffs this week, which are set to impose 25% tariffs on goods from Mexico and Canada as well as the reciprocal tariffs.
Nvidia GPUs are used in AI servers, many of which are imported to the US from Mexico.
US trade data shows the US imported $43 billion worth of "computers" — a data classification category that includes data center servers — from Mexico in 2024. Higher prices of those servers could affect demand for those products, and hence, Nvidia’s AI chips.
Additional sweeping reciprocal tariffs could further affect Nvidia, especially to the extent to which they target Taiwan. Some $33 billion worth of computer parts— including printed circuit boards with Nvidia’s GPUs — were imported from Taiwan in 2024, according to trade data compiled by supply chain analyst and Michigan State University professor Jason Miller.
Taiwan is home to TSMC, the leading AI chip contract manufacturer that produces Nvidia chips.
Trump has also said he may impose an import tax on internationally produced semiconductors "down the road," though it's unclear what such duties would look like. Nvidia has suggested it may feel some impact from tariffs.
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