Global markets tumbled on April 16, 2025, after the US imposed new export licensing rules on Nvidia’s H20 AI chips to China.

Nvidia warned of potential charges reaching US$5.5 billion.

Its stock dropped 9%, wiping out nearly US$250 billion in market value. The broader semiconductor index also fell 4%, continuing a 30% decline over the past two months.

The “Magnificent Seven” tech giants, including Apple, Amazon, and Nvidia, are under pressure from trade tensions, slowing global growth, and rising AI competition from China.

The tech sector remains vulnerable as the global trade war continues to weigh on markets.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Historic tariff levels create regressive economic impacts

The current US tariff escalation represents the most aggressive trade position in over a century, with far-reaching consequences beyond headline market moves.

The average effective US tariff rate has risen to 22.5%, reaching levels not seen since 1909, making this a historically significant trade conflict1.

These tariffs are projected to reduce US real GDP growth by 0.5% for 2025 alone, with long-term impacts of 0.4%, according to detailed economic models1.

Lower-income households will bear a disproportionate burden, facing annual losses of approximately $1,700, as tariffs function as a regressive tax1.

Specific consumer categories face steep price increases. Apparel prices could rise by 17%, while vehicle prices may increase by up to 11.4%, directly impacting household budgets12.

The total projected revenue from tariffs ($3.1 trillion over a decade) will be significantly offset by negative economic effects, reducing the actual revenue by $582 billion due to slowing economic activity1.

2️⃣ Tech sector transforms from safe haven to primary casualty

The US technology sector has undergone a dramatic transformation in investor perception, shifting from perceived safety to primary vulnerability in the escalating trade conflict.