In a week, global markets were cut by nearly $10 trillion, and AI found itself trapped in the most intense storm of life memory.
The market response has been brutal since Trump proposed his cardboard placard last week, with tech stocks bearing the brunt of the brunt.
Apple shares have fallen nearly 20% since the tariff announcement, and the company has gained a lot of exposure to Chinese manufacturing. Tesla only fell by 5% on Monday, while Nvidia also fell, now 25% lower than the beginning of the year.
The spectacular rise of AI is based on a borderless economy. The industry is booming in global supply chains – Taiwan chips, Chinese parliament, European Research Center and U.S. venture capital – are all relatively harmonious.
Taiwan has been hit particularly hard, charging 32% tariffs, which has put its stock market in its worst nose ever, falling nearly 10% in a few days. By Tuesday, Taiwan’s Foreign Minister Lin Chia-Lung scrambled to arrange negotiations with the United States. Tell reporters They are “ready to have a conversation.”
It’s not just about semiconductors, it gets temporary suspended for tariffs. Large-scale data centers that power CHATGPT and other AI services rely on a global supply network of everything from cooling systems to power equipment to building materials – now primarily compliant with tariffs.
Non-symptomatic conductor components represent up to one-third of the cost of data centers, Da Davidson & Co. Gil Luria. Explain to wealthominously adding that semiconductor exemptions “are not permanent.”
Meanwhile, China retaliated against its own tariffs, while AI-generated videos produced by its state media mocked Trump’s economic policies.
https://www.youtube.com/watch?v=hqpf3z5agli
Did Chatgpt design Trump’s tariffs?
This is where the story takes strangely. Shortly after Trump announced his tariffs, economist James Surowiecki noticed something special: the formula behind the tariff calculations looks weird.
It turns out that if you ask Chatgpt, Claude, Gemini or Grok for “easy ways to resolve trade deficits”, they all recommend using the essentially the same approach – dividing a country’s trade deficit with the United States by U.S. exports. This is very similar to what the White House seems to have done.
Just come up with the source of these fake tariff rates. They don’t actually calculate tariff rates + non-tariff barriers as they say. Instead, for each country, they simply compare us to the trade deficit of that country and divide it into exports from countries to us.
So we…
– James Surowiecki (@jamessurowiecki) April 2, 2025
“It’s extraordinary nonsense,” Surowiecki noted, and other economists quickly criticized what seemed to be too primitive.
Transfer responsibility to China
As the market trends, Finance Minister Scott Bessent Tell Tucker Carlson This is not the tariff that caused the market to collapse, but China’s DeepSeek AI platform.
“For everyone who thinks these markets are down is based on the president’s economic policy, I can tell you that this market decline begins with the announcement of DeepSeek by China’s artificial intelligence,” Bessent said. “It’s more of a MAG 7 issue than a Maga issue.”
https://www.youtube.com/watch?v=zlnx1sqfgji
When Bessent mentioned “Mag 7,” he was talking about “Magnificent Seven”, Apple, Microsoft, Alphabet, Amazon, Meta, Nvidia and Tesla, which collectively drove most of the market’s recent earnings.
However, the timeline tells a different story. Global markets were relatively stable until Wednesday’s Trump tariffs were announced, and they were immediately in full swing after that. The latest version of DeepSeek was released a few months before the current crisis began, when the market showed no comparable reaction.
Market numbers from other industries also undermine Bessent’s claims. The day after Trump’s tariff announcement, Dow Jones Jones fell 1,679 points in the day after the day, the biggest single-day point drop since 2020. The timing and amplitude of the decline are undoubtedly for the main catalyst.
What’s next?
Despite the collapse of the market, Trump showed no sign of support. When asked about the suspension of tariffs, he said bluntly: “We are not watching.”
Not everyone thinks that AI will suffer long-term damage, and some claim that AI is actually “preventing tariffs” because of its inherent boundary-free nature and long-term strategic importance.
But today’s Frontier models run in warehouse-sized data centers filled with dedicated chips, cooling systems and power equipment from around the world. add, Despite years of talking about resetting semiconductor production, the United States still relies heavily on foreign chip manufacturing.
The Chip Act was supposed to change this, but the new domestic factories are still years away from meaningful production, a warning sign that the resented works are slow and painful.
Either way, for now, the AI industry and almost every other industry can be viewed and waited, hoping that market turmoil will eventually prevail in some form of temporary and continuity.
