While the stock market has weathered “crisis moments” before, what stands out about the latest round of retaliatory tariffs is the self-destruction that could set the U.S. behind in the artificial intelligence race, according to Wedbush analyst Dan Ives. “The concept of taking the U.S. back to the 1980’s ‘manufacturing days’ with these tariffs is a bad science experiment that in the process will cause an economic Armageddon in our view and crush the tech trade, AI Revolution theme and overall industry in the process,” Ives wrote in a client note on Friday. The levies imposed by the Trump administration on some of the most-relied upon regions for tech supply chains — 50% tariffs on China, 32% tariffs on imports from Taiwan and 46% duties on Vietnam — could close a “shut-off valve” for the U.S. tech industry, according to Ives. IPhones made in the U.S. versus their current manufacturing locations across China, Vietnam and India, would cost $3,500 versus $1,000, Ives said. Broader electronic prices will spike between 40% to 50% for consumers, he added. “The economic pain that will be brought by these tariffs are hard to describe and can essentially take the U.S. tech industry back a decade in the process while China steamrolls ahead,” said Ives. “The AI Revolution trade would be significantly slowed down by these head scratching tariffs that NEED to be negotiated to realistic levels.” Ives noted that “near-term pain” may extend much longer due to the time required to build manufacturing sites in the U.S., as well as to transition the workforce with the necessary skills. “The cost of labor is unrealistic in the U.S. to ever have semi fabs at scale,” said Ives, referring to semiconductor fabrication plants. Tariffs at their current level could depress tech earnings by at least 15% he thinks. “We assume tariff negotiations start now otherwise dark days are ahead for tech… And U.S. consumers pay the price for this… Not a debate.” —CNBC’s Michael Bloom contributed to this report. Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles, and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!
