If the goal is to increase exports, then export curbs won’t help. 
Another Lose-Lose Trade Story
The Wall Street Journal reports Nasdaq Slides 3% After U.S. Tightens Curbs on Nvidia’s China Exports
A tech-stock rout fueled by trade restrictions deepened Wednesday, with the Nasdaq down 3.1% and Nvidia sliding 6.9%.
The third-largest U.S. company by market value warned late Tuesday that it will take a $5.5 billion charge after the U.S. said it will need a license to export H20 processors to China and other countries.
These less-powerful AI chips had been designed to comply with American export controls. The U.S. government confirmed the restrictions, and said it had put similar curbs on rival AMD.
In tech, another industry linchpin also rattled investors. ASML, whose huge, costly machines are needed to make the most advanced chips, reported much weaker-than-expected orders and warned about tariff-related disruption. Shares fell 5.2%.
Trade turmoil also hit one of the country’s oldest industries: shipping. Shares of J.B. Hunt Transport Services lost 7.7% after the company reported on Tuesday an 8% drop in net earnings in the first quarter. The company blamed slower demand from retailers caused by uncertainty over tariffs.
Beijing named a new top trade negotiator, a former ambassador to the World Trade Organization. New data showed China was able to sustain its growth rate in the past quarter, helped by a surge of exports by U.S. importers in anticipation of new tariffs. Major indexes in Asia and Europe declined.
Another Lose-Lose Trade Story
OK, I understand export restrictions on advanced chips. But NVDIA just took $5.5 billion charge for no reason other than a trade war in which both sides lose.
The more interesting aspect of the story is from J.B. Hunt because it doesn’t match today’s retail sales report.
J.B. Hunt reported an 8% drop in net earnings and blamed slower demand from retailers caused by uncertainty over tariffs.
Retail Sales Surge in March Led by Tariff Front-Running of Autos
Earlier today, I reported Retail Sales Surge in March Led by Tariff Front-Running of Autos
Forecasters accurately predicted tariff front-running would accelerate durable goods sales.
On February 14, 2025 (for January), I commented Retail Sales Crash – Did the Consumer Finally Throw in the Towel?
The Census Department shows huge across-the-board declines in multiple categories, down 0.9 percent overall.
On March 17, 2025, I reported Retail Sales Barely Rise in February, They’re Negative Factoring in Revisions
Retail sales had another poor month in February. It’s very recession looking.
March is one month out of three. The next few retail sales reports will be interesting.
Part of the decline today, perhaps even most was a Fed speech by Jerome Powell.
For discussion, please see Fed Chair Powell Warns of Higher Inflation and Slower Growth Due to Tariffs
And NVDA still sells at 20 times sales.
It could go down another 50% and still have a nosebleed valuation.
As CEO Scott McNealy said about Sun Microsystems stock in the early 2000s:
“At 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends. That assumes I can get that by my shareholders. That assumes I have zero cost of goods sold, which is very hard for a computer company. That assumes zero expenses, which is really hard with 39,000 employees. That assumes I pay no taxes, which is very hard. And that assumes you pay no taxes on your dividends, which is kind of illegal. And that assumes with zero R&D for the next 10 years, I can maintain the current revenue run rate. Now, having done that, would any of you like to buy my stock at $64? Do you realize how ridiculous those basic assumptions are? You don’t need any transparency. You don’t need any footnotes. What were you thinking?”
Manufacturing jobs are never coming backPutting Americans back to work in factories isn’t just hard. It’s impossible. https://www.vox.com/future-perfect/408949/manufacturing-jobs-tariffs-trump-trade-automation
$5bn is 3.8% of Sales $130bn. Sales grew 77%. The times, they are a changing. Buckle up and adjust or go back to your drool cup.
What’s going on just seems to be such a tangled web? You have large Globalist organizations such as the WEF and the UN talking about the need for a Global economic reset, a New World Order and than in the middle of this Trump comes along and shakes the entire Global Trading picture with his Tariffs. You almost get the impression that he’s not the outsider he claims to be but that he’s actually participating in the Global Reset under the guise of doing it for America?
Why does he seem to be so pro Mark Carney winning the upcoming Canadian election? Allot thought it was reverse psychology trying to convince Canadians he wants Mark Carney to be Prime Minister so they will dislike Carney but maybe it’s not an act?
The Tangled web.
https://youtu.be/ey2BgX0R1iw?si=pwmTIQQivnzl5DOs
Interesting connections. We are heading to the “spheres of influence” global model.
In order to get everyone to kneel to Trump, the economy must be destroyed.
Bu hao?
“But NVDIA just took $5.5 billion charge for no reason other than a trade war in which both sides lose.”
Yeah, well, whenever you have a high flier like NVIDIA, there is going to be competition, and NVIDIA just admitted that Huawei is a competitor. https://www.cnbc.com/2025/02/27/nvidia-warns-of-competition-from-china-huawei-despite-us-sanctions.html
I do not get why a license will cost you $5.5 billion. https://www.cnbc.com/2025/04/15/nvidia-says-it-will-record-5point5-billion-quarterly-charge-tied-to-h20-processors-exported-to-china.html
In addition to the existing Chinese export controls, Nvidia also faces new restrictions on what it can export starting next month, under “AI diffusion rules” first proposed by the Biden administration.
And this was way before Trump and his tariffs.
If ASML is down volume wise, it would make sense that NVIDIA is as well. Managements pointing the finger elsewhere to compensate for poorer numbers is the oldest trick in the book.
I never understood Nvidia’s valuation. With AI, we were told that it was growing like 5X faster than the internet ever did. If that were true, AI would be the present not the future.
If artificial intelligence was of value
TODAY
it would be processing IRS tax returns in a dark factory.
On top of keeping dumb tards away from free markets…
In other words
IRS checking and processing tax returns
without human contact save for the
human, singular,
that monitor/repair robots,
The robots,
that build, monitor, repair bots,
that actually do the number crunching?
AM I WRONG?
P.S.
dat’s one of the innumerable reasons Mish and I didn’t procreate
Looked into the future and didn’t like where our progeny MIGHT be.
NOT THE ONLY REASON.
innumerable reasons.
It is funny how the Fed does not believe its own data. https://www.bostonfed.org/publications/current-policy-perspectives/2025/the-impact-of-tariffs-on-inflation.aspx
By contrast, the policy that was proposed during the presidential campaign, an additional 60 percent tariff on imports from China and an additional 10 percent tariff on imports from the rest of the world, could have contributed as much as an additional 2.2 percentage points to core inflation.
It is important to emphasize that our estimates represent a first-round effect on prices. That is, they do not take into account how consumers and competitors eventually might adjust to the import price increases that tariffs induce.
Hands up if anyone here who predicted a 60% tariff on China and 10% on the rest of the world result in at worst 2.2% increase in inflation. Anyone got this?
The last PPI was -0.4 percent. If you add that and 2.2, you get 1.8% right? Isn’t that what the Fed’s target rate is?
https://www.cnbc.com/2025/04/16/trade-war-fallout-china-freight-ship-decline-begins-orders-plummet.html
There were sharp decreases in bookings across several categories, including apparel & accessories; and wool, fabrics & textiles, both down over 50%. Major product categories from China that are moved in containers include apparel, toys, furniture, and sports equipment, all of which are subject to steep tariffs.
And the WSJ said China was fine? Uh, okay.
The assumption with inflation is that Americans are going to pay higher prices for these items. I do not buy that. Almost all these purchases can be deferred or people can get by with used or repaired if they really need them at all.
If you think inflation is coming, you have to believe that demand will stay constant, and I do not see that at all.
As in 2008, the tug of war between inflation and disinflation-deflation can be challenging to understand, especially the timing of multiple whipsaws as forced selling of assets such as gold occur during different stages in a credit crunch. I learned important lessons from Mish and others during that period, but not enough to time whipsaws reliably. Mish doesn’t claim to be able to time whipsaws.
The head-on collision on the Clown Car Parkway that is the Trump Idiocracy gives the reward of incompetence, stupidity, and failure every day.
The only queation now is will A meri c a a nd the world survive the rest of his term?
Id say its unlikely
How can the government tax profits and pay down the deficit if there aren’t any profits? Why is trump destroying so much equity and shareholder value?
These are chips that no one else wants!
Tariffs are a tax on purchasing imports not a tax on profits.
Aiding, abetting, and trading with the enemy is a crime. Nvidia should have known better. Who is next?
They produced the chips that the US government told them to produce. Lower capability chips that no one else would even want. But chips the US government said would be okay to sell to China.
Then after producing them, the US government changes their mind. And now they are stuck with them.
What a show! It’s fascinating to watch!
Government regulations preventing the sale of AI semiconductors to China are intended to prevent the sale of semiconductors to China. The regulations are not a game to finesse around the regulations. The penalty for Nvidia is $5.5 billion. Playing games with Donald Trump is a losing game. Would Nvidia care to play another round for $10.5 billion?
GREAT ANALYSIS
trump and bessent are idiots if they think trying to isolate china from the world trading of goods and services is even remotely possible. i actually think trump cares only about headlines and his name in the limelight worldwide. bessent is just a craven corporate ass kisser. life long soros tool.
China was singled out, lassoed, hog tied, branded, and castrated.
A bit early to declare “Mission Accomplished,” no?
“It is not their lies per se that characterize malignant narcissists, rather it is the subtlety and persistence and consistency of their lies. This is because the central defect of malignant narcissists is not the sin but the refusal to acknowledge it. Rather than blissfully lacking a sense of morality, like the psychopath, malignant narcissists are continually engaged in sweeping the evidence of their evil under the rug of their own consciousness.
It is out of their failure to put themselves on trial that their evil arises.”The narcissist looks down on everyone and exploits people all of his life. For many narcissists life is all about money and power.”
Linda Martinez-Lewi, Narcissist’s Outrageous Self Entitlement
In the case of trump and his pawns, the lies are outrageous and blatant. Repeated every day by Fox News – which is mainstream media on steroids!
Jealous much?
i agree. there is a great book, “the sociopath next door”. about 4% of humans. gives one warning signs for life
Zelensky says Ukraine and US are nearing a deal on strategic mineralsUkrainian President Volodymyr Zelensky says talks with Washington on a long-delayed minerals agreement are making ‘good progress,’ with a deal potentially days away.https://www.lemonde.fr/en/international/article/2025/04/16/zelensky-says-ukraine-and-us-are-nearing-a-deal-on-strategic-minerals_6740309_4.html
Too little, too late. Those minerals will not help USA in the next 5-10years if not longer. We are at economic war with China right now, not in ten years.
perhaps this time the contagion in finance will go from the deflation rampant in china r/e and commerce past few years to the west.
I’m guessing Zelenskyyy is trying to sell minerals that will be in Russian hands before long. The whole thing is pointless.
Zelensky will sign the deal he was offered. Negotiation is not an option. He tried negotiation in the White House and got the bums rush, missed lunch, got his cities burned, lost Kursk, and his country will be partitioned.
what a waste of human life and amerikan money poured into ukraine.
Those minerals have been the subject of a fair amount of study for many years and they have not been economical to extricate and process. Even is a full on effort was mounted to get them ut of the ground and smelted it would be at least five years to build the infrastructure.
This is what happens when a leader like trump fires first and then aims his weapon. Lots of unnecessary pain!
As usual, things like this are being played for headlines, by a guy who lacks the attention span to figure out what the true nature or costs of any chess piece is. That’s why conservatives such as Adam Smith, James Madison and Hayek criticized command economies — too centralized, and the info is not efficiently at the small narrow top. When he was younger, Trump’s deals were simpler, and he had better assistants. Now all the political noise and news cycle-timed impatience is feeding back into the massive sad joke that is this decision making process. And Trump’s impulsivity and power-intoxication has got worse, if that is imaginable.
Really happy to see my hero, James Madison, mentioned. No greater genius nor a more stoic man ever lived.
Perhaps if Biden had thought about the exposure and leverage with rare earth minerals that China holds over the US, he might have given Ukraine the weapons it needed to win the war near the beginning, instead of being miserly, afraid to cross Putin’s many red lines?
Now it will be a decade or more before Ukraine could deliver enough minerals to be useful.
LOL. Biden was reckless enough to get us to the very precipice of World War III, and yet, you are saying he didn’t do enough??!! What more should he have done? Lob a nuke at Moscow????!!!!
Sheesh!