MW Trump's China tariffs are a 'Category 5 price storm' for U.S. consumers, warns analyst Dan Ives

By James Rogers

'Saying we can just make this in the USA is a statement that incredibly understates the complexity of the Asia supply chain,' the Wedbush analyst notes

President Trump has roiled markets with his sweeping raft of tariffs announced last week - and those he is threatening against China, in particular, could spell bad news for U.S. consumers, according to Wedbush analyst Dan Ives.

This week, Trump threatened an additional 50% tariff on China, after previously hitting the country with a 20% tariff earlier this year and a 34% tariff announced last week. China, which has already imposed retaliatory tariffs against the U.S., has vowed to take more countermeasures in response to Trump's threat.

"Saying we can just make this in the USA is a statement that incredibly understates the complexity of the Asia supply chain and the way electronics/chips/semi fabs/hardware/smartphones, etc. are made for U.S. consumers over the last 30 years," Ives wrote in a note released Tuesday. That supply chain, he added, is the foundation the U.S. tech world is built upon.

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The tariff agenda, according to Ives, is akin to flipping a boat upside down in the ocean with no life rafts and telling U.S. tech and auto companies like Apple Inc. $(AAPL)$, Nvidia Corp. $(NVDA)$, Microsoft Corp. $(MSFT)$, General Motors Co. $(GM)$, Advanced Micro Devices Inc. $(AMD)$ and others: "Good luck!"

Ives pointed to Nintendo Co. Ltd.'s $(NTDOY)$ (JP:7974) decision to halt preorders for the Switch 2 console in the U.S., given the tariffs. "This is just the beginning of every electronic [company] heading down the same treacherous path and U.S. consumers are about to see this Category 5 tariff storm hit the shores of the U.S.," the analyst added.

In a separate note, Ives, a noted Apple bull, described the "tariff economic armageddon," unleashed by Trump as a "complete disaster" for Apple given its massive Chinese production exposure. "In our view, no U.S. tech company is more negatively impacted by these tariffs than Apple with 90% of iPhones produced and assembled in China," he wrote.

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In Tuesday's note, the analyst explained that it takes four to five years to build a factory in the U.S., adding that the U.S. labor force and cost structure "goes against the entire concept of the modern supply chain." The economic pain brought by these tariffs could "essentially take the U.S. tech industry back a decade in the process while China steamrolls ahead," Ives said.

Set against this backdrop, a 50% China tariff and the Trump administration's 32% Taiwan tariff could cause electronics prices to increase 40% to 50% for consumers, according to Ives. "iPhones made in the U.S. would cost $3,500 (vs. $1,000), and the AI Revolution trade would be significantly slowed down by these head-scratching tariffs that NEED to be negotiated to realistic levels," he wrote. "If not, it's darker days ahead for the tech world and U.S. consumers will be paying the price for it."

In January, the Consumer Technology Association industry group warned that a 60% to 100% tariff on all imports from China could increase the cost of laptops and tablets for U.S. consumers by 46% to 68%. Videogame-console prices could increase by 40% to 58% and smartphone prices could increase by 26% to 37%, according to the CTA.

-James Rogers

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April 08, 2025 13:57 ET (17:57 GMT)

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