Shares of leading US companies, such as Apple, Amazon, and Tesla, experienced significant declines during after-hours trading on Wednesday. This downturn followed the implementation of a comprehensive tariff regime by former President Donald Trump, raising concerns about potential disruptions to global supply chains.
Technology companies bore the brunt of the initial market response, as contracts linked to the Nasdaq dropped by 4 percent. Apple faced a notable impact, with its shares plummeting by 7 percent due to its considerable exposure to additional tariffs on China. Amazon’s stock declined by approximately 6 percent.
The escalation of Trump’s global trade war introduced considerable risks to technology supply chains. Top executives had previously spent months engaging with the president to mitigate the effects or secure exemptions from policies potentially harmful to their financial performance.
Other sectors were similarly affected on Wednesday, as major retailers and consumer brands also saw declines in their stock prices following the tariff announcement. Walmart experienced a drop of 7 percent, while Target’s shares fell by more than 5 percent, and Nike’s shares decreased by 7 percent in after-hours trading.
The tariffs included a 10 percent levy applied universally to all countries from midnight Eastern Time on April 5. Higher “reciprocal” tariffs, targeting multiple regions including the EU, China, the UK, Japan, and South Korea, were scheduled to take effect from midnight Eastern Time on April 9.
According to Wedbush analyst Daniel Ives, the array of new tariffs represented a scenario worse than the market’s fears. “Tech stocks will clearly be under major pressure due to concerns about demand destruction, supply chains, and particularly the impact on China and Taiwan,” Ives stated.
Executives at major technology firms expressed frustration with the current administration, describing the situation as “trying to hit a moving target.” One executive mentioned concerns about the potential economic impacts on the US beyond the tariffs themselves.
In response to inquiries, Apple declined to comment on the possibility of securing an exemption from the new tariffs, unlike the situation during Trump’s first term. The White House confirmed that there were no exemptions for Apple in the executive order.
Apple CEO Tim Cook faces the challenge of managing the company’s supply chains, which are closely tied to China, where Foxconn produces millions of iPhones annually. Apple’s announcement in February of a $500 billion spending plan was seen as an effort to appease Trump.
The company ships approximately 50 million iPhones to the US annually, with most manufactured in China. iPhones are Apple’s flagship product, accounting for over half of its total revenue, with the remainder coming from its Mac, iPad, wearables, and services segments.
Trump also announced additional tariffs, including a 34 percent “reciprocal” tariff on Chinese imports, a 26 percent tariff on India, and a 46 percent tariff on Vietnam. These measures would potentially impact Apple’s close supply chain relationship with China and hinder its attempts to diversify manufacturing.
Amazon has also been working to engage with Trump, having faced his criticism during his first term. Founder Jeff Bezos attended Trump’s inauguration and has maintained a dialogue with him. Amazon relies on Chinese imports to stock its warehouses, with approximately a quarter of its retail costs tied to China, according to Morgan Stanley analysts.
Nvidia shares fell by over 5 percent after-hours, despite assurances from the White House that semiconductors were temporarily exempt from the reciprocal tariffs. The company depends on Taiwan Semiconductor Manufacturing Co. for the production of its advanced artificial intelligence chips.
TSMC shares also fell by approximately 6 percent in after-hours trading, even after the company’s recent commitment to investing an additional $100 billion in US chip manufacturing.
Meta’s shares dropped by around 5 percent, as the company had previously warned about potential impacts on its China-related advertising revenue in case of a trade dispute escalation.
Furthermore, Trump confirmed the imposition of 25 percent tariffs on all foreign-made cars and parts, affecting US automakers’ shares. Tesla’s shares fell by 8 percent in after-hours trading, with concerns about global supply chain impacts and potential retaliatory tariffs on the electric vehicle manufacturer.
Tesla had previously cautioned that the costs of vehicle production could rise due to sourcing challenges within the US, and that American cars might become less competitive internationally.
The White House stated that certain items already subjected to tariffs, such as cars and car parts, as well as copper and specific minerals not available domestically, would be exempt from the new tariffs.
Daniel Newman, CEO of The Futurum Group, described Trump’s move as a “rip-the-Band-Aid-off moment” for tech investors. He commented on the market’s reaction, noting its dependence on an accessible economy.
For retailers, the announcement of new tariffs came despite their efforts to diversify supply chains following heavy tariffs on Chinese imports during Trump’s first term. Suppliers for Home Depot, the largest home improvement chain, had shifted some production to Southeast Asia, Mexico, and the US, according to CEO Ted Decker. Similarly, Target had moved its apparel production away from China, opting for Central American countries, including Guatemala and Honduras. However, Trump imposed 10 percent tariffs on Guatemala and Honduras.
Target chose not to comment on these developments.
Michael Hanson, senior executive vice president at the Retail Industry Leaders Association, warned that the newly announced tariffs, along with anticipated retaliatory measures, could destabilize the US economy and counteract efforts to bolster domestic manufacturing.
The new tariffs have prompted immediate calls for relief. The Consumer Brands Association, which includes companies like PepsiCo, Mondelez, and Kraft Heinz, requested exemptions for certain essential ingredients from the tariffs. The association encouraged a more nuanced approach to trade policy to protect manufacturing jobs and prevent unnecessary inflation.
Additional reporting was provided by Rafe Uddin, Hannah Murphy, and Alex Rogers.