Nvidia (NVDA) stock dropped as much as 2% Friday morning after US President Trump claimed that China had “totally violated” an agreement with the US.
The tech-heavy Nasdaq (^IXIC) fell 0.3%, while the S&P 500 (^GSPC) was down just 0.1% late Friday morning.
“The bad news is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US,” Trump said in a post on Truth Social. “So much for being Mr. NICE GUY!”
The US and China agreed to temporarily reduce sky-high tariff rates in mid-May after a meeting between US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng in Switzerland.
In what the White House called a “historic deal,” the US dropped its duties on China to 30%, while China decreased its tariff on the US to 10% and agreed to “suspend or remove the non-tariff countermeasures.”
But late Thursday, Bessent said in an interview with Fox News that US-China trade talks were “a bit stalled.”
Read more: The latest news and updates on Trump’s tariffs
Trump did not give further details about how China had violated its preliminary agreement with the US, but US Trade Representative Jamieson Greer echoed the president’s sentiments in an interview with CNBC Friday, saying that “the Chinese are slow-rolling their compliance.”
While Nvidia was largely unscathed by the import tax on Chinese goods enacted in April — since most of its chips are made in Taiwan and then manufactured in servers in that country or Mexico — the company took a $5.5 billion hit from the Trump administration’s separate, recent ban on sales of its chips to China. Nvidia makes specialized, lower-performance versions of its Hopper AI chips for the China market called H20.
Nvidia revealed in its latest quarterly earnings report this week that it lost $2.5 billion in sales in the first quarter due to the ban and expects another $8 billion loss in the second quarter.
“China is, and will remain, the largest overhang on NVDA shares until we get resolution from the Trump administration,” DA Davidson analyst Gil Luria said in a note to investors Thursday. China is one of Nvidia’s biggest markets.
Nvidia CEO Jensen Huang said the company has no new products planned for the Chinese market.
“We don’t have anything at the moment, but we’re considering it,” he told analysts following the company’s earnings release Wednesday. “Obviously, the limits are quite stringent at the moment. And when the time comes, we’ll engage the [Trump] administration and discuss that.”
Some on Wall Street remain optimistic about Nvidia’s China prospects.
