This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.
President Trump's "Liberation Day" has come and gone, and markets around the globe are predictably reeling from what is essentially morphing into a full-blown reconstitution of the global trade order. In this chaos, raw semiconductors have surprisingly emerged as an island of calm solace.
LIBERATION DAY RECIPROCAL TARIFFS 🇺🇸 pic.twitter.com/ODckbUWKvO
— The White House (@WhiteHouse) April 2, 2025
To wit, President Trump has now imposed a baseline tariff of 10 percent on all US imports, plus a veritable host of reciprocal tariffs on some of the biggest trading partners of the US.
Interestingly, Trump's "Liberation Day" announcements carved out quite a few exceptions. Steel, aluminum, vehicles, and auto parts - all of which remain subject to individual tariffs under Section 232 - remain exempt. Notably, imports of vehicles and auto parts will continue under a 25 percent tariff regime.
Also, Trump seems to have dealt a much more lenient blow to Canada and Mexico, where the USMCA-compliant goods will remain exempt from all tariffs, while non-compliant goods will be subjected to a 25 percent tariff. Also, non-compliant energy and potash will be subjected to a 10 percent tariff.
Just figured out where these fake tariff rates come from. They didn't actually calculate tariff rates + non-tariff barriers, as they say they did. Instead, for every country, they just took our trade deficit with that country and divided it by the country's exports to us.
So we… https://t.co/PBjF8xmcuv
— James Surowiecki (@JamesSurowiecki) April 2, 2025
Soon after Trump unveiled "Liberation Day" reciprocal tariffs, they became the object of confusion and controversy. It seems that the Trump administration simply divided America's trade deficit with a particular country by its export of goods to the US to come up with an estimation of the effective tariff (including trade barriers) that US goods are supposedly subjected to. In doing so, the administration seems to have ignored the export of US services to individual countries, where America typically has a surplus, plus instances of genuine comparative advantage.
Impact from Tariffs Increase: pic.twitter.com/MtvnUUObpp
— Wall St Engine (@wallstengine) April 3, 2025
Meanwhile, an ING report has tabulated that Trump's tariff regime will cost a typical American family an average of $1,350 per year, with the impact skewed towards the bottom 60 percent of households.
Separately, Bernstein analyst Stacy A. Rasgon has taken a stab at calculating the impact of Trump's tariffs on raw semiconductors, PCs, servers, and smartphones.
Rasgon believes that Trump's tariffs equate to a "blended global tariff rate in the ballpark of ~25%, which (applied to 2024 import levels) would have driven up import costs by over $800B based on 2024 import levels."
The Bernstein analyst then notes that the US imported raw semiconductors worth $82 billion in 2024. As such, "10% effective cost/price increases on these are probably not going to do all that much (we note that semiconductor ASPs have risen 50% since pre-COVID anyway)."
However, Rasgon estimates a ~40 percent effective tariff on PCs, servers, and smartphones:
"As it turns out, most semiconductors enter the US inside other things (like PCs, servers, smartphones, cars etc). In 2024 the US imported ~$200B in data processing machines (PCs, servers, etc), mostly from Mexico, Taiwan, China, and Vietnam. We also imported ~$114B in wireless phones, with about half coming from China. We (roughly) calculate a tariff burden on these imports of close to $120B, which would be a tariff rate approaching 40% (elevated given the high level of China exposure as China tariffs, over 50% combined, are extreme)."
As per some tabulations, the effective tariff rate on China is 54 percent now but could increase to 79 percent if Trump ends up imposing an additional 25 percent tariff on the Asian giant for continued imports of Venezuelan crude oil. Also, Trump has abolished the de-minimis rule that had previously allowed sub-$800 imports into the US from China at $0 cost.
On the whole, the Bernstein analyst sees semiconductors being most impacted by indirect factors stemming from Trump's Liberation Day announcements, such as demand destruction and supply chain disruption.
Note:
A previous version of the article claimed that the effective tariff rate on China is 79 percent. This error has now been corrected.
