Weekly Buzz: Chips on the table: How new trade rules could reshape tech 🖥️

5 minute read

When governments change the rules of trade, it can ripple through industries – and your portfolio. Last week, Washington announced two moves that could reshape the semiconductor sector, the building block for everything from cars to cloud computing.

What’s going on here?

First came President Trump’s 100% tariff threat on imported chips, sparing only those deemed “American enough.” That exemption sent shares of firms with major US manufacturing bases surging, while smaller, import-reliant players were left scrambling. Apple’s stock rose 3% after pledging another US$100 billion to domestic production.

Here’s where it gets messy: what exactly does "built in the US" mean when a single chip involves hundreds of components from dozens of countries? With US factories supplying just 12% of global output for semiconductors, any sudden shift could lift prices well before new capacity comes online.

Then came the “pay-to-play” deal: Nvidia and AMD can keep selling AI chips to China, but must hand 15% of those revenues to the US government. Investors took it in stride – better 85% of a market than none – but it’s a deal that blurs the line between export controls and revenue collection.

What does this mean for you?

Together, these moves tilt tech toward a more politically driven playing field. US companies with deep pockets and political leverage could consolidate their lead, while smaller players risk being priced out — and that dynamic may spill over into other industries.

That’s why diversification remains critical. If you're invested in tech through broad market funds, you're likely already exposed to these global champions. These latest shifts are a reminder that policy risk is just as real as market risk — a portfolio that’s built across regions and sectors is better equipped to both ride out the turbulence, and capture the opportunities.

For a portfolio designed to handle these shifts in tech and trade, check out General Investing.

 📰 In Other News: When data integrity becomes a market risk

Markets have weathered plenty of drama, but few moments have struck at market trust like this: the US President firing the Bureau of Labor Statistics Commissioner just hours after a weak jobs report, citing concerns over data accuracy.

July’s US jobs numbers were underwhelming – only 73,000 jobs added versus the 115,000 expected – and major revisions that erased 258,000 jobs previously reported. Markets reacted swiftly: the Dow Jones index fell 700 points and the VIX – an index that measures market volatility – jumped 25%. Yet within days, prices had recovered as markets focused instead on strong corporate earnings reports.

The longer-term concern isn’t just a weak month of hiring, but the precedent this sets. The independence of US statistical agencies has long been a cornerstone of the country’s economic credibility. The Bureau’s work underpins the Consumer Price Index that shapes inflation expectations, the jobs data that guides Federal Reserve decisions, and the indicators used in investment models worldwide.

🎓 Simply Finance: Policy risk

Policy risk is the chance for government decisions to impact investments. This differs from market risk, which stems from economic forces like supply and demand. If the government bans a product, that's policy risk, if customers simply stop buying it due to changing preferences, that's market risk.

📺 In the Press

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