Tech Titans Soar As US Waives Tariffs For Allies, Slaps China With 125% Hike

Chip Stocks Surge as Trump Pauses Tariffs for US Allies, Targets China with 25% Duties

April 25, 2019 - In a move that has sent shockwaves through the global semiconductor industry, President Donald Trump announced Wednesday that the United States will pause tariffs on steel and aluminum imports from US allies, while simultaneously imposing a 25% duty on Chinese goods.

The decision has sparked a surge in chip stocks, with companies such as Intel (INTC), Micron Technology (MU), and Texas Instruments (TXN) all seeing significant gains. The Philadelphia Semiconductor Index, which tracks the performance of 30 leading chip stocks, jumped 3.5% Wednesday, its biggest one-day gain since February.

The move to pause tariffs on steel and aluminum imports from US allies, including Canada, Mexico, and the European Union, is seen as a relief for those countries, which had been hit hard by the tariffs. The decision is also expected to boost US economic growth, as the tariffs had been seen as a major drag on the economy.

However, the decision to impose a 25% duty on Chinese goods has sparked concerns about the potential impact on the US-China trade relationship. China has been a major market for US chip companies, and the tariffs could lead to a decline in demand for US-made chips.

The move is also seen as a sign that the US is taking a tougher stance on China, which has been accused of unfair trade practices and intellectual property theft. The US has been seeking to address these issues through trade agreements, including the proposed US-China trade deal that has been stalled in recent months.

The decision to impose tariffs on Chinese goods is expected to have a significant impact on the global chip industry, with companies such as Taiwan Semiconductor Manufacturing Company (TSM) and South Korea's Samsung Electronics (SSNLF) likely to be affected.

In a statement, the Semiconductor Industry Association (SIA) said that it "welcomes the administration's decision to pause tariffs on steel and aluminum imports from US allies, while also expressing concern about the potential impact of tariffs on Chinese goods."

The SIA noted that the tariffs could lead to a decline in demand for US-made chips, which could have a negative impact on the industry. The group also called on the US and China to work together to address the issues that have led to the tariffs.

Overall, the decision to pause tariffs on steel and aluminum imports from US allies and impose tariffs on Chinese goods has sent shockwaves through the global chip industry, with companies and investors alike waiting to see how the situation plays out in the coming weeks and months.