Chip Stocks Rally on Reports of US Tariff Delay on China
Semiconductor giants like Nvidia and Intel rise as the White House reportedly reconsiders imminent tariffs, easing fears of a renewed trade war.
A broad rally lifted semiconductor stocks on Wednesday following multiple reports that the Trump administration is considering a delay on implementing significant new tariffs on Chinese-made chips. The news provided investors with a measure of relief from the threat of escalating trade tensions and potential supply chain disruptions.
Shares of major U.S. chipmakers reacted positively to the news. Nvidia (NVDA) saw its stock climb 2.85% to $186.52 in morning trading, while Intel (INTC) gained 2.27%, reaching $35.11. The sentiment suggests a belief that a delay could protect the substantial revenue these companies derive from the Chinese market and avoid a repeat of the costly trade disputes that have previously roiled the sector.
The potential policy shift eases immediate concerns over proposed tariffs that could have reached as high as 100%. Such a steep levy would have significantly increased costs for U.S. companies that rely on Chinese manufacturing and assembly, with the impact likely filtering down to consumer electronics prices. According to reports from sources including The Straits Times, administration officials have privately signaled the delay to industry stakeholders, citing a desire to avoid stoking inflation and provoking a new round of retaliatory measures from Beijing.
This development introduces a note of caution into the administration's otherwise hawkish stance on trade with China. While officials have publicly denied any change in policy, the widespread nature of the reports suggests a significant internal debate over the timing and economic impact of the proposed measures. The tariffs, authorized under Section 232 of the Trade Expansion Act, are intended to protect domestic industries deemed critical to national security.
For the global semiconductor industry, any de-escalation in trade friction is a welcome sign. The sector operates on a deeply interconnected global supply chain where components and raw materials cross borders multiple times before a final product is assembled. An abrupt increase in tariffs threatens to unravel these complex networks, creating logistical bottlenecks and raising operating costs.
Analysts suggest a delay would provide critical breathing room for chipmakers, allowing them to better navigate existing supply chain challenges and meet strong demand for chips used in everything from data centers and artificial intelligence to automotive and personal electronics. The market's positive reaction underscores how sensitive the sector remains to geopolitical developments.
Despite the immediate optimism, the situation remains fluid. The White House has not formally announced a decision, leaving the industry in a state of uncertainty. Investors will be closely watching for any official clarification, as the prospect of future tariffs continues to represent a significant risk for the semiconductor sector's long-term growth and profitability.