Tech and artificial intelligence companies briefly saw relief after a supreme court ruling curtailed some of the administration’s use of emergency powers to impose tariffs, but that optimism faded quickly as the White House signaled a more aggressive global trade stance. The technology sector has been grappling with tariffs as a distinct headwind compared to earlier tech cycles, particularly given its deep exposure to complex United States and China supply chains. Many companies across the artificial intelligence stack are contending with fast-moving business models that amplify the impact of shifting trade rules on pricing, capital planning, and long term strategy.
Market reaction initially leaned positive, as investors focused on the lifting of certain levies and the ability of hardware makers to reconfigure production. “Included in the exemptions were smartphones, servers and PCs. The big thing that remained was a 20% tax on imports from China, where many of these products are assembled. Some of these goods also got slapped with a 25% IEEPA tariff on imports from Mexico. Now, those have been lifted.” Many firms had already mitigated the worst effects by shifting assembly to other countries, with Apple raising iPhone capacity in India and benefiting as “In its first quarter, Apple’s products gross profit margin increased by 1.4 percentage points from the year before, despite the tariff headwind. Apple stock rose 0.6% in midday trading, after being down as much as 0.9%.” Shares of Dell, Hewlett Packard Enterprise, Nvidia, Advanced Micro Devices, Arm, and Taiwan Semiconductor Manufacturing rallied, while “Intel makes chips in the U.S., and its stock remained down over 2% during midday trading.”
The policy backdrop turned more uncertain when President Trump, angered by the legal setback, escalated his tariff threats and embraced a rarely used statute to impose a sweeping global levy. “President Trump announced on Saturday that he would raise his new, global tariff to 15 percent, a day after he took steps to replicate some of the punishing duties that had been struck down by the Supreme Court.” He had “previously set his replacement global rate at 10 percent, using a provision in a law – never before invoked by a president – that allows him to impose an across-the-board tariff for 150 days unless Congress agrees to extend it. The statute caps the rate at 15 percent, though Mr. Trump has signaled he plans to use other trade provisions to continue raising taxes on imports.” Legal constraints and political pushback, highlighted by arguments from Neal Katyal and others, complicate the administration’s path, but the expectation is for tariffs to persist in new forms rather than recede. As a result, chief executives and boards in both tech and non tech sectors are operating “war rooms” to manage ongoing trade and tariff risks, while artificial intelligence companies across the “AI staircase” stack confront heightened volatility in revenues, margins, and profits as geopolitical trade forces reshape the economics of training, inference, and scaling intelligence token processing.
