US stocks sink after Trump says he’s considering a “massive increase” of tariffs on Chinese imports
More tariffs might be back on the menu.
US stocks reversed lower after US President Donald Trump said in a Truth Social post that he is considering a “massive increase” on tariffs of Chinese imports.
Trump said he’s mulling higher levies as well as “many other countermeasures” because of “the hostile ‘order’ that they have just put out” restricting the export of rare earth metals. He also seemingly canceled his upcoming meeting with Chinese President Xi Jinping in South Korea in two weeks, saying “now there seems to be no reason to do so.”
The SPDR S&P 500 ETF, Invesco QQQ Trust, and iShares Russell 2000 ETF all gave up early gains to fall more than 1%. A basket of stocks compiled by Goldman Sachs of US companies that have significant revenue exposure to China is off more than 2%.
Wafer fab equipment stocks Lam Research, Applied Materials, and KLA Corp, which all count China as their top market, are underperforming, as is iPhone seller Apple.
Chip stocks Advanced Micro Devices, Intel, Broadcom, and Nvidia are all getting hit on the news, as rare earths are needed components for semiconductor production. For Tesla, it’s a similar story given its footprint in China and the importance of rare earths for EVs.
There’s also a lot of plain old dumping of recent winners.
Super Micro Computer, Coinbase, and Robinhood Markets are among the biggest laggards since Trump’s post as investors cut risk.
(Robinhood Markets Inc. is the parent company of Sherwood Media, an independently operated media company subject to certain legal and regulatory restrictions.)
The rare earth curbs are far from the only recent example of China stepping up its defense of domestic industry and resources. Qualcomm is the subject of an antitrust investigation, stringent checks of semiconductor shipments are reportedly in place as officials look to keep Nvidia’s chips from entering the country, and separate reporting indicates that US ships will be charged an escalating fee for docking at Chinese ports.
