Knock-On Tariff Effects Could Sting U.S. Chip Industry -- WSJ

Dow Jones00:32

By Asa Fitch

American chip companies may escape a big direct impact on their business from President Trump's latest tariffs, but levies on computers, cars and other chip-containing products could end up hurting, analysts say.

The U.S. doesn't get a huge amount of its imported chips from Canada, Mexico or China-less than 10% of them, according to a note from analysts at Bernstein Research.

But it does import a ton of products that contain chips, with smartphones, personal computers and cars among them. For example, the U.S. brought in $55 billion of handsets from China, and $28 billion of personal computers and servers from Mexico in 2023, according to Bernstein.

Higher prices for those items, driven by higher tariffs, could reduce demand for them, which would be bad for chip companies. Those indirect threats are the larger potential worry for the industry, the Bernstein analysts said.

Chips stock were broadly lower midday Monday, but not by a huge amount. While Nvidia was down about 3%; Intel bucked the trend, up 1.2% at one point.

This item is part of a Wall Street Journal live coverage event. The full stream can be found by searching P/WSJL (WSJ Live Coverage).

(END) Dow Jones Newswires

February 03, 2025 11:32 ET (16:32 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.

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