BOOM: Wall Street's biggest tech bull warns of $3,500 iPhones as 'economic Armageddon' looms from Trump tariffs
finance.yahoo.com
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In a note to clients on Friday, Ives sounded the alarm on the state of the tech trade as the reality of Trump's shock tariff announcement on Wednesday continues to sink in across the investment world.
"The concept of taking the US 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.
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Ives also flagged an issue Nick Colas at DataTrek highlighted in a Friday morning note too: There's a duration mismatch between US politics and Trump's manufacturing ambitions.
"It will take many years for companies to shift production here, but Americans go to the polls every two years for Congress and four years for the presidency," Colas wrote.
"Should newly announced trade policy cause a recession and incremental inflation, the lingering effects of both will be on voters’ minds, especially in 2028," he added.
In Ives's view, the cost of labor in the US makes it "unrealistic" that we could ever reshore semiconductor fabrication.
"If these tariffs went into place at current form overall tech earnings would come down 15% at least, the supply chain will be a Rubik's Cube rivaling Covid days, and the economy would go into a recession/stagflation," Ives wrote.
Less than an hour before Ives' note hit the inbox, headlines crossed that China would slap 34% retaliatory tariffs on US imports.
"We assume tariff negotiations start now otherwise dark days are ahead for tech," Ives added, "and US consumers pay the price for this ... not a debate."
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