The US stock market has experienced an unprecedented decline in the days following President Donald Trump’s announcement of sweeping global tariffs, with losses exceeding the total value of all US equities in 1990.
The tech sector, a cornerstone of the US economy, has borne the brunt of this turmoil, with major companies like Apple and Nvidia witnessing double-digit drops in their share prices.
Apple, valued at over $3 trillion before the tariffs, saw its stock plunge by more than 9% in the immediate aftermath, while Nvidia, a leader in AI chip manufacturing, fell by around 6%.
The market chaos has also forced valuable startups Klarna and StubHub to postpone their anticipated initial public offerings, signaling a broader retreat from risk amid economic uncertainty.
Even Nintendo delayed pre-orders for the highly anticipated Switch 2, a move attributed to the tariff-induced market turbulence.
Apple, emblematic of the consumer electronics industry’s reliance on global supply chains, faces significant challenges.
The iPhone’s components originate from dozens of countries, many of which overlap with nations targeted by Trump’s tariffs, including China, India, and Vietnam.
Despite efforts to shift production to India, the transition hasn’t moved fast enough to offset the impact.
Nvidia, despite a temporary exemption for some semiconductors, remains vulnerable due to its dependence on Asian manufacturing hubs like Taiwan, where most advanced chips are produced.
The White House’s carveout for semiconductors is seen as insufficient by industry observers, with Wired reporting that costs for AI infrastructure, a US-led sector, could rise sharply due to import restrictions and supply chain disruptions.
Tesla and Musk face dual setbacks
Tesla, another tech giant closely tied to Elon Musk’s influence, has also seen its stock decline by double digits, compounding existing pressures.
The company relies heavily on China for both manufacturing and sales, areas now hit by Trump’s 34% tariff on Chinese goods.
Musk’s recent public break with Trump, advocating for a “zero-tariff” deal with the European Union, drew a sharp rebuke from Germany’s outgoing economy minister, who called Trump’s economic models “ridiculous” and Musk’s stance “a sign of weakness.”
This divergence comes amid Tesla’s weak first-quarter delivery numbers reported on Wednesday and a political loss in Wisconsin, where Musk’s $20 million backing of a conservative Supreme Court candidate failed to secure a win.
These setbacks have fueled speculation about Musk’s standing with Trump.
The tension escalated when Trump and Vice President JD Vance suggested Musk would exit his role at the White House, potentially by late May, given his status as a “special government employee” with a 130-day term.
Musk dismissed these claims as “fake news,” but the remarks indicate a possible cooling in their alliance.
Trump has defended Musk’s performance, and Vance emphasized Musk’s continued role as a “friend and adviser,” suggesting the relationship remains intact despite the public friction.
However, Tesla’s stock slump cannot be attributed solely to tariffs; its decline predated the announcement, reflecting broader market dynamics and company-specific challenges.
Silicon Valley’s political gamble backfires
The tech industry’s heavy investment in Trump’s political rise now appears to be backfiring.
During his January inauguration, Silicon Valley’s elite— including Musk, Jeff Bezos, and Mark Zuckerberg—were prominent guests, signaling strong support.
Tim Cook, Apple’s CEO, contributed $1 million to the event but maintained a lower profile, a strategy that has historically helped Apple navigate Trump’s policies, as noted by The New York Times.
Yet, the tariff fallout has exposed vulnerabilities, with companies like Apple and Nvidia facing higher costs that could erode profitability.
The industry had hoped Trump would champion tech as a national asset, a view echoed by Chamber of Progress CEO Adam Kovacevich in The Washington Post, but the tariffs suggest a shift toward economic nationalism that prioritises manufacturing over innovation.
Cook’s subtle diplomacy may yet yield exemptions, as Apple has secured similar relief in the past.
However, the broader tech sector’s reliance on global supply chains—spanning China, Taiwan, and Europe—clashes with Trump’s “America First” agenda.
Forbes highlights that companies with diversified operations in tariff-free zones like India and Vietnam may fare better, but the abrupt policy shift has disrupted planning.
The delay of high-profile IPOs and product launches underscores the economic strain, raising questions about the industry’s alignment with Trump’s vision.
TikTok delay hints at deeper trade tensions
In a related development, Trump signed an executive order on Friday to delay the TikTok ban or sale for another 75 days, marking the second such postponement.
ByteDance, TikTok’s parent company, cited ongoing negotiations with the US government, complicated by China’s hesitation following the tariff announcement.
This move reflects the intricate interplay of trade and technology policy, with Trump balancing national security concerns against economic fallout.
The decision may also signal an attempt to appease tech stakeholders amid growing discontent.
Billionaires’ influence reshapes national security
Silicon Valley billionaires’ influence on US national security has reached new heights under Trump, further complicating the tech-Trump dynamic.
The Guardian reports that Musk, Bezos, and Palmer Luckey are reshaping intelligence operations, traditionally dominated by firms like Lockheed Martin.
Musk’s SpaceX collaborates with Palantir and Anduril to challenge the defense industry’s old guard, leveraging personal ties to Trump.
This shift has raised concerns about conflicts of interest, especially as Musk’s companies secure significant government contracts.
While this influence bolsters their power, it also ties their fortunes to Trump’s unpredictable policies, potentially straining their alliance if economic losses mount.
Cracks in the alliance?
The tariff-induced market rout has exposed potential cracks in the Trump-tech bond.
Musk’s public dissent and Tesla’s struggles suggest a divergence of interests, while Apple and Nvidia grapple with supply chain costs that undermine their global competitiveness.
The White House’s defense of Musk contrasts with hints of his departure, creating ambiguity about his role.
Meanwhile, Cook’s quieter approach may test Trump’s willingness to protect tech giants.
The industry’s initial enthusiasm, rooted in hopes of deregulation and AI growth, now faces a reality of higher costs and trade wars.
Whether this marks a permanent rift or a temporary strain depends on Trump’s next moves, but the stakes are high for both sides.
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