Donald Trump hasn’t moved into the White House for his second term just yet, but his tariff proposals are already prompting action within American industry.
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The president-elect has made clear that he is sharply focused on implementing tariffs against multiple U.S. trade partners, including China, Canada and Mexico.
During his first presidency, Trump opted for tariffs against all three nations, thrusting the U.S. economy into a trade war.
Trump won’t be sworn in until Jan. 20, and he has only broadly discussed how big the tariffs might be and on which products they’d be imposed.
But some companies are already taking major steps to avoid becoming casualties if another trade war breaks out. In particular, companies that depend on business relationships with Chinese firms are taking no chances.
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Among them, two leading chipmakers have announced a key operational change that might be a bellwether.
Donald Trump is still the president-elect but his tariff plans are already prompting action at major U.S. tech companies.
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Silicon Valley is already on edge as tariffs loom
Since the artificial-intelligence system ChatGPT launched in November 2022, semiconductors have emerged as one of the hottest areas of technology.
Most people outside the tech field probably don’t think about them too much, but these small devices are a key component of the AI boom, which is transforming entire industries.
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And this area of the tech industry may be facing complications if Trump moves forward with his tariffs against China.
According to reports, both Nvidia (NVDA) and Advanced Micro Devices (AMD) , two of Silicon Valley’s most prominent chipmakers, are preparing to ship out some of their highly anticipated chips ahead of schedule.
Both companies are said to be planning to ship their new graphics cards before Jan. 20, Inauguration Day.
Trump has stated that he plans to quickly levy tariffs against China. And while both Nvidia and AMD operate in the U.S., they depend on Chinese companies for various stages of the chip-production process, including assembly and testing.
Citing local Chinese media, tech blog Wccftech reports that companies producing add-in boards for Nvidia and AMD are significantly ramping up production in an attempt to help their Big Tech partners start shipping out their next graphics-processing units to mainstream U.S. markets.
The report describes these decisions as “another move to squeeze in more profits since the tariffs are imminent to increase consumer prices, but manufacturers will get in more profits for the initial GPU stock.”
Nvidia’s GPUs are expensive, even by Big Tech standards. So far, even AMD hasn’t been able to seriously threaten its dominance in the booming AI-chip market.
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But if Trump’s proposed 60% tariff against Chinese imports is implemented, both companies could see their production costs spike, as importing both components and finished products would likely become significantly more expensive.
With that in mind, it makes sense that companies like Nvidia and AMD would be prioritizing shipping out their new GPUs before Trump’s tariff policies take hold.
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Nvidia and AMD aren’t the only tech companies that have opted for this type of action. Microsoft (MSFT) , Dell Technologies (DELL) and HP (HPQ) have also reportedly urged their suppliers to increase production speed in response to the looming Trump tariffs.
Other U.S. companies that deal with China could face further complications in the coming months as well. China has discussed further scrutiny of tech deals, likely as a retaliatory measure against the U.S. for the tariff threats.
Trump tariffs could complicate the AI boom
With many tech companies taking action to avoid being hurt by the Trump tariffs, concern about increasing production costs and supply-chain constraints clearly is rising in Silicon Valley.
One pressing question is just how much the proposed tariffs on Chinese imports would lift GPU prices.
According to Wccftech, “a reasonable estimate would likely be $1,799 for the [Nvidia] GeForce RTX 5090. So, factoring in a 40% tariff, Nvidia’s flagship GPU can cost around $2,500. The tariff would shake up the consumer GPU markets in terms of pricing, and will also fuel in demand for second-hand GPUs as well.”
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That’s a fairly significant cost hike, especially since Nvidia’s chips are already highly priced.
Other tech companies such as Google (GOOGL) and Amazon (AMZN) are hard at work developing their own AI chips in an effort to reduce their dependence on those made by Nvidia and AMD.
If Trump’s tariffs lead to a spike in prices for Nvidia and AMD GPUs, other Big Tech companies might be forced to double-down on in-house chipmaking. This ever-changing market could be on the verge of another massive shift.
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