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Shares of major technology companies with exposure to China and Taiwan, including Nvidia (NVDA, Financials), Apple (AAPL, Financials), Taiwan Semiconductor Manufacturing Co. (TSM, Financials) and Tesla (TSLA, Financials), fell between 6% and 7% by Thursday morning after the U.S. announced new tariffs targeting trade partners with large surpluses.
The selloff followed a White House announcement on Wednesday outlining a set of retaliatory tariffs designed to mirror the average tariff levels that other countries apply to U.S. goods. The plan was unveiled by President Donald Trump during remarks at the White House Rose Garden.
Wedbush Securities said the hardest hit will likely be companies deeply connected to Chinese and Taiwanese supply chains. The proposed rates include a 34% tariff on China, which could effectively rise to 54% after factoring in existing duties, and a 32% tariff on Taiwan. The firm said the announcement prompted a wave of investor concern regarding future profitability and supply chain risks.
Despite the drop in share prices, Wedbush analyst Daniel Ives described the market reaction as overblown, calling the situation temporary, not permanent. He said long-term investors may view the current decline as an opportunity to accumulate quality tech stocks at discounted valuations.
Ives sharply criticized the tariff methodology, describing it as based on misleading calculations involving national trade surpluses and total U.S. imports. He said the White House figures did not represent actual tariff rates and likened the analysis to an assignment that would be rejected in a basic high school economics class.
The numbers are so convoluted, theyre hard to take seriously, Ives said in a note to clients. He warned that upcoming first-quarter earnings reports could be clouded by uncertainty, potentially prompting companies to withhold forward guidanceechoing behavior seen during the onset of the COVID-19 pandemic in 2020.
Looking ahead, Wedbush said investors may begin to shift their focus to 2026 earnings forecasts, assuming that tariff-related disruptions begin to ease over the next three to six months.
This article first appeared on GuruFocus.