U.S.-China Trade Tensions Resurge, Shaking Global Markets. On April 16, 2025, despite China’s economic data beating expectations and offering temporary relief, Australia’s S&P/ASX 200 index still closed down 2.8 points at 7758.9. What overshadowed market sentiment was U.S. President Trump’s announcement of new chip export rules, triggering a sharp sell-off in tech stocks.
Tech giant Nvidia saw a major after-hours decline after revealing it could face potential losses of up to USD 5.5 billion (around AUD 8.7 billion) from restrictions on chip exports to China. This heightened global concerns about the stability of the semiconductor supply chain and inflated tech stock valuations.
▲ Nvidia Hit Hard, Tech Sector Under Pressure
Nvidia confirmed for the first time that its high-performance GPU chips destined for China would be severely impacted by the new export restrictions. Although the company had previously developed an alternative chip (“H20”) to navigate earlier rules, the severity of the latest restrictions far exceeded expectations, forcing investors to reassess Nvidia’s growth prospects in China.
The move had a broad impact on the tech sector:
• U.S. semiconductor stocks broadly declined after-hours, with the Nasdaq weakening;
• Tech stocks across Asia-Pacific also came under pressure, including ASX-listed firms related to chip materials and tech services;
• Risk-off sentiment rose, sending gold prices up nearly 2%.
▲ ASX Index Remains Stable on Surface, but Sectoral Divergence Grows
While the overall ASX index recorded only minor losses, there was significant divergence across sectors:
• Growth-oriented tech stocks fell sharply;
• Resource and gold stocks saw modest gains due to safe-haven inflows;
• Entertainment stocks like Star Entertainment experienced sharp swings due to individual negative developments.
• Australia’s stock market is becoming increasingly linked to global policy shifts, particularly U.S. policy pivots that impact export-oriented tech firms and companies with China exposure.
▲ Trump’s Policy Moves Heighten Risks – U.S.-China Relations Are Key Uncertainty
The Trump administration’s latest export restrictions target not only AI chips and high-end GPUs but may extend to cloud computing, autonomous driving, and other high-tech areas. This blending of “national security” and “technological supremacy” poses a risk of deep restructuring across the global tech industry.
Despite the White House’s repeated claims of being “open to dialogue with China,” there has been no substantial progress, leading to a scenario where verbal softening contrasts with policy tightening — making it difficult for businesses and investors to chart a clear course.
• Investment Advice: Focus on Structural Opportunities and Hedge Against Policy Risk
In a climate of rising uncertainty, investors should strategically re-evaluate their asset allocation:
① Be cautious with chip and AI sector valuations
Short-term policy shocks are significant. Consider second-tier tech stocks benefiting from “domestic substitution” or “supply chain diversification.”
② Watch safe-haven sectors like gold, defense, and cybersecurity
These may see valuation rebounds amid heightened geopolitical risk.
③ Enhance global exposure and increase USD-denominated assets
A diversified portfolio across regions and currencies offers greater resilience in turbulent markets.
▲ Conclusion: Risk Unleashed, But Also a Window for Revaluation
Nvidia’s potential AUD 8.7 billion export loss signals a possible tectonic shift in the global tech industry. For investors, this is not only a period of risk but also an opportunity to identify new growth tracks and position
for long-term value. The market is uncertain — but opportunities remain. The key lies in who can see clearly through the chaos.
