NVIDIA Corporation (NASDAQ:NVDA) shares are trading higher on Monday after the Biden administration announced a trade investigation into China's semiconductor industry.
What To Know: The "Section 301" investigation focuses on China's production and trade practices for "legacy" semiconductors, which could lead to higher U.S. tariffs on these components according to Reuters. The probe aims to protect U.S. semiconductor producers from China's state-driven industry expansion and examines the impact of Chinese chips on critical sectors such as defense and automotive.
The U.S. has already increased export restrictions on advanced AI and memory chips to China and imposed a 50% tariff on Chinese semiconductors starting Jan. 1, with the potential for higher tariffs in the future. China's Commerce Ministry has criticized the U.S. investigation, stating that it will disrupt the global chip industry and supply chains.
The broader context potentially includes escalating trade tensions between the U.S. and China, with China retaliating by restricting exports of critical minerals used in chip production. NVIDIA's stock is rising amid the semiconductor industry's response to these developments, reflecting optimism about reduced competition from Chinese producers and potential benefits for U.S. chipmakers.
NVDA Price Action: Nvidia shares were up 3.24% at $139.06 at the time of writing, according to Benzinga Pro.
