President Trump announced on Friday that the United States will impose an additional 100% tariff on Chinese imports beginning November 1, 2025, marking a sharp escalation in trade tensions. He stated that the U.S. would also implement "critical software" export restrictions targeting China on the same date.
Currently, U.S. tariffs on certain Chinese goods approach 145% on select items, though these have been suspended until November 10 while both sides engage in broader trade agreement negotiations. Meanwhile, other U.S. tariff measures continue to advance. New tariffs on kitchen and bathroom cabinets took effect October 1, while tariffs on lumber and other wooden products including furniture will be implemented October 14. The suspension of tariffs on Mexican goods is also expected to end early next month.
Additionally, the Supreme Court is expected to hear litigation challenging Trump's "reciprocal tariff" policy next month. An unfavorable ruling could significantly impact the policy and its associated tariff revenues.
U.S. stock markets declined Friday amid threats of tariff escalation. Analysts believe investors are concerned that renewed trade friction will burden global supply chains and corporate confidence.
Amazon.com (AMZN.US), NVIDIA (NVDA.US), and Tesla (TSLA.US) shares each fell approximately 5%, with the three companies collectively losing about $770 billion in market value. This dragged the Nasdaq index down 3.56% and the S&P 500 down 2.71%, marking the worst single-day performance since April.
Chip manufacturer NVIDIA led the decline with a market cap reduction of approximately $229 billion on Friday. The company became the first to surpass a $4.5 trillion market capitalization at the end of September. NVIDIA produces GPU chips that are essential for training artificial intelligence models, with customers including cloud computing giants like Microsoft and serving as a key supplier to OpenAI.
OpenAI's user demand continues growing rapidly. In September, the company launched its video generation application "Sora 2," while its flagship product ChatGPT has surpassed 800 million weekly active users. However, Microsoft, as OpenAI's primary cloud service partner, must continue expanding data center infrastructure investments to maintain operations, with its market value declining approximately $85 billion on Friday.
Amazon.com's stock also faced pressure in the selloff, with full-year gains completely erased and currently down about 2% from the beginning of the year. The company competes with Microsoft in the cloud GPU rental market but has limited direct business dealings with OpenAI. Amazon.com's market cap fell $121 billion in a single day.
CEO Andy Jassy stated during a July analyst call that external concerns about tariff impacts were exaggerated, saying "many reports are incorrect, and we cannot predict what will happen next."
Electric vehicle manufacturer Tesla, which just launched a lower-priced model on Tuesday, was not spared, losing approximately $71 billion in market value in one day. The company plans to release third-quarter earnings on October 22, with Microsoft reporting results the following week and NVIDIA disclosing quarterly results in November.
Furthermore, Google parent company Alphabet (GOOG.US, GOOGL.US) fell about 2%, while Facebook parent Meta (META.US) dropped nearly 4%, indicating rapidly cooling market risk appetite toward the technology sector overall.