Trump Tariff Plans Broaden Trade Fight Amid Nvidia Rally
Nvidia's blowout earnings report sent chip stocks soaring on Thursday, with semiconductor ETFs rallying in early morning trade. The iShares Semiconductor ETF (SOXX) rose nearly 3%, while the VanEck Semiconductor ETF (SMH) gained as much as 3.3%. This surge in the chip sector was fueled by Nvidia's impressive earnings report, which saw the company beat Wall Street expectations with a profit of $2.22 per share.
However, this positive news may be short-lived, as the Trump administration is reportedly considering new tariffs on the chip industry. According to a Politico report, the administration is exploring different approaches for potential new semiconductor tariffs, which could potentially cover not only chips but also products that use them, including laptops and gaming consoles.
Commerce Secretary Howard Lutnick favors a structure that would link foreign companies' tariff relief to investment in U.S. semiconductor manufacturing. This framework could incentivize chipmakers to expand domestic production while allowing companies that commit to U.S. investment to receive some relief from the proposed duties.