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Indirect Hit In Store for Chip Makers; Bracing for a Flood of Chinese Goods By Mark R. Long

Chip makers dodged targeted tariffs , but won't be immune to the effects of President Trump's blitz of new duties.

Semiconductors animate an ever-expanding universe of consumer goods, and a wave of order cancellations along the supply chain are likely on tap as higher prices for those products smother consumer demand . The WSJ's Asa Fitch writes in Heard on the Street that direct U.S. imports of chips, which totaled around $82 billion last year, won't be subject to tariffs, but most imports are indirect. Chips are manufactured overseas, packaged and inserted into electronics shipped around the world, including the U.S., where they will face tariffs as high as 49%.

Bernstein Research estimates the U.S. imported about $521 billion of machinery, $478 billion of electronics and $386 billion of vehicles last year, all of which contain lots of chips. If higher prices deter buyers, the chip makers will suffer. There is no new incentive for chip makers to boost manufacturing in America, as even U.S.-made chips are exported to Asia before coming back inside tariffed goods. And companies with big U.S. footprints won't get a leg up on competitors since their rivals will get the semiconductor tariff exemption.

Canada will match Trump's auto tariffs with 25% duties of its own on U.S. vehicles that don't comply with the U.S.-Mexico-Canada trade pact. (WSJ) Jeep maker Stellantis is pausing production at its assembly plants in Mexico and Canada. (WSJ) New tariffs could hurt U.S. exports of crude oil and other petroleum products, one of the few sectors helping reduce the trade deficit. (WSJ) The end of the de minimis tariff exemption could be a silver lining for Amazon, potentially easing competition from Temu and Shein, but it could also bring a new challenge. (WSJ) The new tariffs take aim at some of the fastest-growing economies in Asia, threatening to disrupt trade in places such as Vietnam that are crucial to global supply chains. (WSJ) Some American ranchers welcomed the tariff plan , hoping it will curb beef imports and raise the value of their cattle. (WSJ) CONTENT FROM: PENSKE Gain AI. Gain Ground with Penske.

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Tariff Flap

Penguins, but no humans, live on the remote Heard and McDonald Islands. That didn't spare the territory , which lies more than 5,000 nautical miles from Sydney, from a new 10% tariff, since it is administered by Australia's office for Antarctica. Norfolk Island-a subtropical Australian territory of some 2,200 people-got socked with a 29% tariff. Quotable Domino Effect

The towering wall of tariffs on China threatens to bring a big new problem for global trade and supply chains: a $400 billion deluge of Chinese goods looking for new markets.

The Journal's Jason Douglas and Rebecca Fung write that, from April 9, Chinese imports will face tariffs of an average of 70%, which will likely push up prices in the U.S. for consumer electronics, toys, machinery and critical manufacturing components. This risks diverting some U.S.-bound Chinese exports into a global market already awash with Chinese-made goods . Vietnam, South Korea and Japan also could see barriers rise to their exports as U.S. spending falls and their goods get shunted elsewhere.

Surging Chinese exports have already ratcheted up tensions among big economies, and could rise further if Chinese exporters try to unload too many shipments that had been bound for the U.S.

China's services-sector activity expanded at a faster pace in March on improving demand boosted by government stimulus measures. (WSJ) Taiwanese contract electronics manufacturer Wistron plans to establish a U.S. unit and invest up to $50 million on land and factories. (Nikkei Asia) Number of the Day In Other News

U.S. initial jobless claims moved lower last week, according to the Department of Labor. (WSJ)

Swiss inflation was unchanged in March , though U.S. tariffs threaten to roil the economy and push the Swiss central bank to cut rates further. (WSJ)

French aerospace and defense company Thales plans to recruit 8,000 people this year, with half of them joining sites in France and U.K. (WSJ)

Hershey agreed to a roughly $750 million deal for the popcorn brand LesserEvil . (WSJ)

Infrastructure investor AIP Management committed about $500 million to solar developer Silicon Ranch, betting on increased demand for renewable electricity in the U.S. (WSJ)

Conagra posted lower earnings and said it was hit by surging consumption of frozen vegetables that depleted its inventory. (WSJ)

Liner operators cancelled about 10% of their scheduled sailings on major east-west trade routes to stem a drop in freight rates. (TradeWinds)

Port Houston ordered 16 hybrid rubber-tired gantry cranes from Finland's Konecranes and will retrofit eight existing ones. (American Journal of Transportation)

U.K. maritime law firms Tatham and Sea Green Law merged into a single 22-lawyer practice. (Splash 247)

British investigators said the arrested captain of a containership that crashed into an anchored tanker, killing one, was alone on the bridge despite fog in the area. (Maritime Executive)

BNSF Railway will launch a faster international intermodal service linking the ports of Seattle and Tacoma to Chicago and then points east with Norfolk Southern. (Journal of Commerce)

Ethiopian Airlines started a cargo charter route from China's Macao to Madrid. (Air Cargo News)

Executive Insights

Here is our weekly roundup of stories from across WSJ Pro that we think you'll find useful.

Private-equity employees may face layoffs unless the industry's asset sales and fundraising picks up in 2025. All emerging technology needs to deliver on its promise, sooner or later. For AI agents, that time is now. A number of companies are being sued in Europe for not doing enough to tackle climate change, even as firms in the U.S. face lawsuits for focusing too much on green issues. True Religion, a one-time god of denim, is embracing the fans who stayed faithful through two bankruptcies, with $400 price tags a thing of the past.

Mark R. Long is editor of WSJ Logistics Report. Reach him at [mark.long@wsj.com]. Follow the WSJ Logistics Report team on LinkedIn: Mark R. Long , Liz Young and Paul Berger .

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

April 04, 2025 07:02 ET (11:02 GMT)

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