In This Story
U.S. consumers should brace for punishing price increases as President Donald Trump’s trade war heats up, especially as tariffs on imports from China ripple through supply chains.
That’s according to Wedbush Securities analyst Dan Ives, who warned in a note early Tuesday “the economic pain that will be brought by these tariffs” is “hard to describe.” He said the tariffs would “essentially take the U.S. tech industry back a decade in the process while China steamrolls ahead.”
Ives said Trump’s threatened 50% tariffs on China, along with 32% tariffs on Taiwan, “would essentially cause a shut-off valve from the U.S. tech landscape and in the process cause every electronic to go up 40%-50% for consumers, iPhones made in the US would cost $3,500 (vs. $1,000), and the AI Revolution trade would be significantly slowed down by these head scratching tariffs that NEED to be negotiated to realistic levels.”
Warning of a “Category 5 Price Storm” for U.S. consumers, Ives added: “Saying we can just make this in the USA is a statement that incredibly understates the complexity of the Asia supply chain and the way electronics/chips/semi fabs/hardware/smartphones, etc. are made for U.S. consumers over the last 30 years. Its the foundation the U.S. tech world is built on and these tariffs are flipping a boat upside down in the ocean with no life rafts telling US tech/auto companies such as Apple (AAPL+4.00%), Nvidia (NVDA+2.52%), Microsoft (MSFT+1.86%), GM (GM-0.05%), AMD (AMD+5.21%) among so many others ‘good luck!’”
Ives’ warning came as stock futures suggested some calm might return to markets Tuesday after days of bleeding and volatility, despite the prospect of continued trade war escalation.
After last week saw major market indexes suffer their worst losses since the heigh of the coronavirus pandemic, losses narrowed Monday, even as the S&P 500 briefly touched bear market territory (the tech-heavy Nasdaq Composite is already in a bear market, which is defined as losses of 20% from a recent peak).
Shortly before markets opened Tuesday, futures tied to the Dow Jones Industrial Average had surged more than 1,200 points, or about 3.2%. S&P 500 futures were up about 3% while Nasdaq futures rose 2.9%.