Micron Technology (MU -9.59%) stock is getting hit with big sell-offs Thursday. The memory-chip and storage company's share price was down 12.3% by midday. At the same point in the day's trading, the S&P 500 and the Nasdaq Composite were down 5.4% and 6.2%, respectively.

Micron skyrocketed yesterday after President Donald Trump announced a 90-day pause on his administration's reciprocal tariff policy for almost all countries. The lone carve-out in the tariff reprieve was China, which will instead see its tariff rate raised from an already-high 104% to 145%. Investors are focusing on the potential fallout of the escalating trade war and selling out of stocks today.

Micron stock heads lower amid increasingly adversarial U.S.-China relations

Whipsaw volatility is continuing for the broader market today, and Micron is seeing a big valuation pullback as investors weigh the potential for the trade war between the U.S. and China to continue intensifying. Concerns that China could move to invade or otherwise exert greater control over Taiwan sometime in the next several years are also adding to bearish sentiment.

What's next for Micron?

According to a report published yesterday by DigiTimes, a Taiwan-based newspaper, Micron could move to raise prices on products sold in the U.S. due to the new tariff policies. Micron is headquartered in the U.S. and has production facilities in the country, but it also relies on manufacturing plants in Taiwan and Japan.

Raising prices could help the company maintain its margins and continue to capitalize on demand for highly profitable memory chips for artificial intelligence (AI) data centers, but there's a risk that the move will cause customers to cut back on order sizes. More generally, there's a risk that macroeconomic uncertainty will cause customers to push AI infrastructure expansion plans further out -- leading to lower sales for Micron.