Donald Trump's trade war with China significantly affected various tech companies, despite their previous support for his campaign. Companies like Tesla, Nvidia, and Amazon experienced substantial financial losses as a result of the tariffs. Elon Musk's criticism of Peter Navarro, Trump's senior trade advisor, highlights the strained relationship between the administration and previously supportive businesses.
Nvidia's decision to invest in AI infrastructure in the US resulted in restrictions on selling AI chips to China, costing the company $5.5 billion. Amazon faced increased costs for goods due to the tariffs, creating uncertainty for its third-party sellers. Meta, despite its support for Trump, didn't gain any protection from the antitrust case it's facing.
Even initial tariff exclusions for certain electronics were short-lived, as Trump stated that nobody was getting off the hook, resulting in uncertainty in the pricing of goods like iPhones.
The stock prices of these tech companies have suffered significantly, driven by investor concerns about re-emerging inflation and the potential for a US recession. Elon Musk, Jeff Bezos, and Mark Zuckerberg, major Trump supporters, have collectively lost over $80 billion since the initiation of these trade policies. The article questions the return on investment for these companies' political contributions.
It provides context for Musk’s lashing of Trump’s senior trade adviser Peter Navarro last week, labelling him “truly a moron” and “dumber than a sack of bricks”.
Trump’s trade war with China has produced plenty of corporate casualties – Musk’s Tesla is only one.
They are rapidly discovering that contributing to Trump’s campaign – or becoming public fanboys – has not provided the insurance policy they had anticipated for their organisations.
AI hotshot Nvidia has just found out the hard way that cosying up to Trump doesn’t guarantee safety.
Nvidia boss Jensen Huang recently dined with Trump and days later declared he would build $US500 billion in artificial intelligence infrastructure on US soil. Yet, he was hit overnight with a US government decision to restrict the sale of certain AI chips to China.
Loading
That decision cost Nvidia $US5.5 billion, and investors are now worried about the world’s hottest company becoming collateral damage in Trump’s tariff war.
Amazon founder and shareholder Jeff Bezos, meanwhile, is having to contend with the fact that the company’s goods are becoming more expensive – creating enormous dislocation and uncertainty for its army of third-party sellers. Just how much prices will rise depends on which country they are selling in.
And if Meta chief Mark Zuckerberg had thought his support for Trump would have rewarded him with government support for the antitrust case Meta is facing, he will now have experienced a dose of reality.
And the appearance last week that the tech bros got a reprieve when Trump announced a tariff exclusion for smartphones, computer chips, hard drives, memory chips and other selected electronics was short-lived.
Trump took to social media soon after to declare that “NOBODY is getting off the hook”.
So consumers will need to wait to see, for example, where the price of an iPhone will land.
Even if tech is ultimately dealt with more favourably than other sectors, the shares in these stocks have been savaged as investors factor in the re-emergence of inflation and a slowdown or even a recession in the US economy, on the back of Trump’s trade agenda.
You would have to wonder about the return on investment the rich tech supporters have received on their contributions to Trump’s campaign.
Bezos, Musk and Zuckerberg have collectively lost more than $US80 billion since “Liberation Day”.
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.
Skip the extension — just come straight here.
We’ve built a fast, permanent tool you can bookmark and use anytime.
Go To Paywall Unblock Tool