On the weekend of April 12, 2025, the White House announced tariff exemptions on semiconductors and smartphones. This included Apple (AAPL) iPhones. It later clarified the exemptions would be temporary.
Last week, on April 16, Nvidia (NVDA) reported that the U.S. government would require it to have an indefinite, special license for shipping H20 graphic processing units and related chips to China. The requirement is puzzling since Nvidia previously complied with chip restriction rules during Biden’s presidency.
AMD (AMD), an Nvidia rival, fell by even more that day. ASML (ASML) also fell in sympathy. The reversal is confusing for Nvidia shareholders. Unfortunately, they will need to face a lower stock price as a result of policies whose direction changes quickly.
To gauge when the NVDA stock weakness will end, watch the U.S. dollar and bond markets. The weak currency and soaring yields are a vote against such trade restrictions and tariff policies.
Watch DeepSeek
Nvidia wrote down $5.5 billion in response to the new license requirement. Unfortunately, chip sales to China matter for the firm and the other chip suppliers. Although DeepSeek claimed that it used weakly powered GPUs to build its AI, the scientific community is skeptical. The firm likely used thousands of chips and would need H20 chips to advance its development.
Nvidia’s stock downtrend might continue so long as government tariffs and trade restrictions escalate.