Trump administration's technology tariffs create supply chain disruption across the tech sector.
When Donald Trump announced sweeping tariffs on 75 countries' exports to the US, analysts predicted the next iPhones Americans would buy would cost north of $2,000. Apple reportedly flew 600 tons of iPhones into the country in response – 1.5 million devices. Trump has since partly walked back those plans, with the White House announcing the exclusion of some electronic products from steep reciprocal tariffs on China, and shares in Apple and chip maker Nvidia were on course to soar after tariffs on their products imported into the US were lifted for 90 days. However, commerce secretary Howard Lutnick said on Sunday that critical technology products from China would face separate new duties along with semiconductors within the next two months, announcing that Trump would enact "a special focus-type of tariff" on smartphones, computers and other electronics products in a month or two.
Confusion has reigned throughout the tariff rollout. Experts have said there is little possibility of manufacturing an entire iPhone – or any piece of consumer electronics – in the US alone, with Apple itself calling such a feat unfeasible. Yet Apple received a temporary exemption, perhaps a product of Tim Cook's favorable relationship with Trump. Other companies proved less fortunate: Nintendo suspended preorders for the Switch 2 indefinitely, unveiled just one day before Trump's first tariff announcement, while Sony announced a 25 percent price increase for the PlayStation 5 in the UK, Europe and Australia due to the levy on Japanese goods by the US.
Nvidia, a major loser in the trade war because of its specialized and globalized supply chain, announced Monday that it would manufacture AI supercomputers entirely in the US, in Houston, commissioning a million square feet of manufacturing space. More concretely, Nvidia announced plans to start making its latest chip model, Blackwell – considered the cream of the crop for AI development – at Taiwan Semiconductor Manufacturing Company's plant in Phoenix, Arizona. Ironically, Trump's fixation on reshoring high-tech manufacturing to the US may spur more immigration into the country, as the US does not train enough workers with the specialized technical expertise for semiconductor manufacturing to staff major plants. A "tiny Taipei" has already sprung up around the Phoenix facility.
The environmental consequences of tech infrastructure expansion have also come into focus. Elon Musk's xAI, his AI company that just bought X, is accused of doubling the number of methane gas burning turbines at its enormous Memphis datacenter. New aerial images obtained by the Southern Environmental Law Center show that xAI has been using portable generators to power its massive supercomputer without yet securing permits, with the group saying these gas turbines combined can generate around 420 megawatts of electricity – enough to power an entire city. Meanwhile, Amazon, Google and Microsoft's datacenters continue to consume enormous amounts of natural resources, particularly electric power and water, in regions without much of it.