The consequences of the global trade war of US President Donald Trump are increasingly felt in many industries simultaneously and on Wednesday again put pressure on the US stock markets, which have been agitated for several weeks by his unpredictable trade policy, UNN writes with reference to Reuters.
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Shares fell across the board, with technology stocks hit particularly hard after leaders such as Nvidia, closely linked to the global supply chain, warned of a possible hit to their net profit.
Meanwhile, airlines said they were preparing for an uncertain summer travel season, and the head of the US Federal Reserve noted a slowdown in economic activity, but also expressed concern about the threat that tariffs pose to his goal of lowering inflation.
And while Trump has said that numerous countries are lining up to make deals with the United States, progress has been slow and uncertain. The US President was scheduled to personally negotiate with Japan on tariffs on Wednesday.
Although the market volatility that erupted two weeks ago has subsided, business leaders still say that uncertainty is hampering spending plans. The world's two largest economies, the US and China, are continuing a full-scale trade war, and the status of US negotiations with the EU, Canada and other countries is unclear.
"What was true yesterday is no longer true today, what will be tomorrow, I don't know," said Jean-Christophe Babin, CEO of Rome-based Bulgari, the jewelry subsidiary of luxury giant LVMH, regarding US tariff policy.
Technology companies were at the forefront of events on Wednesday.
AI chip giant Nvidia said its sales to China would cost it $5.5 billion due to administration restrictions on AI chip exports, while ASML, the world's largest supplier of computer chip manufacturing equipment, said tariffs have made prospects for both 2025 and 2026 uncertain. Other US chip manufacturing equipment makers could lose about $1 billion a year due to tariffs, industry representatives told lawmakers last week.
On Wednesday, stocks fell again across the board, with the technology-heavy Nasdaq Composite falling 3%, led by a 7% drop in Nvidia. Another chipmaker, Advanced Micro Devices, said it would lose $800 million due to administration restrictions on sales to China.
Even more optimistic companies have softened their positive sentiment. United Airlines maintained its 2025 earnings forecast, but unusually laid out two scenarios for the year, saying the macroeconomic environment is "impossible to predict this year with any degree of certainty."
Some automakers have discussed moving some production to the US, but that's no easy task. "We need to have a kind of break in tariffs for a while so we can organize ourselves for localization... and move the supplier base to the US," Nissan Americas Chairman Christian Meunier told Reuters, adding that the process will take years.
US Federal Reserve Chairman Jerome Powell, in a speech in Chicago, emphasized the slowdown in the economy, and added that "inflation is likely to rise as tariffs find their way in, and some of these tariffs will be paid by the public."
US consumer sentiment has deteriorated sharply since Trump stepped up his rhetoric around tariffs in mid-February.
Bank executives have said in recent days that consumer spending has not fallen much, but cracks are beginning to appear. Retail sales were resilient in March, thanks in large part to the best month for car sales since 2023, but other components of spending were weaker, and spending in the service sector may begin to decline as people hoard goods, worried about rising prices.
Retailers are also aware of this possibility, as Chinese discounters Temu and Shein have urged shoppers to buy "now at today's prices," saying in nearly identical letters that they will raise prices from April 25.
Spending on goods and equipment - both in the US and from the US - may also face a bumpier trajectory.
"Everyone was fighting in March, trying to buy something," said Marco Bebek, sales manager at L.B. White, which makes equipment for pig farms in the US that is sold in Canada.