Nvidia stock drops as tech leads markets lower after Trump backs broader reciprocal tariffs

Nvidia (NVDA) stock fell as much as 4% premarket Monday after US President Donald Trump said he won’t be granting any countries softer treatment when it comes to reciprocal tariffs.

Speaking aboard Air Force One on Sunday, Trump said reciprocal tariffs set to be announced on April 2 (which he’s dubbed “Liberation Day”) will target all countries, killing hopes from investors that his trade policy actions would be less aggressive and fueling recession fears.

Trump’s latest comments spurred a sell-off across markets, with US tech stocks leading the way lower and shares of Tesla (TSLA), down over 5%, pacing losses among the “Magnificent Seven” tech stocks.

Nvidia was already set to feel an impact from Trump’s tariffs this week, which are set to impose 25% tariffs on goods from Mexico and Canada as well as the reciprocal tariffs.

Nvidia GPUs are used in AI servers, many of which are imported to the US from Mexico.

US trade data shows the US imported $43 billion worth of “computers” — a data classification category that includes data center servers — from Mexico in 2024. Higher prices of those servers could affect demand for those products, and hence, Nvidia’s AI chips.

Additional sweeping reciprocal tariffs could further affect Nvidia, especially to the extent to which they target Taiwan. Some $33 billion worth of computer parts— including printed circuit boards with Nvidia’s GPUs — were imported from Taiwan in 2024, according to trade data compiled by supply chain analyst and Michigan State University professor Jason Miller.

Taiwan is home to TSMC, the leading AI chip contract manufacturer that produces Nvidia chips.

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Trump has also said he may impose an import tax on internationally produced semiconductors “down the road,” though it’s unclear what such duties would look like. Nvidia has suggested it may feel some impact from tariffs.

“Tariffs will have a little impact for us short term,” CEO Jensen Huang told analysts in a call during its annual GTC conference.

Huang said that long term the company is “preparing to manufacture onshore” in the US, pointing to TSMC’s recent $100 billion investment to expand its US chip manufacturing footprint.

Nvidia stock has been slammed in 2025 — down more than 18% year-to-date as of premarket trading Monday — as investors scrutinize high valuations of companies in the AI trade and brace for trade wars.

Ahead of Trump’s commentary Sunday, analysts had suggested the US president’s tariffs were not fully priced in the markets, Yahoo Finance’s Josh Schafer reported.