How the 2025 Trade War Is Reshaping Tech, AI, and Investment Strategies

If you're looking at the markets right now and thinking, "Wait, what just happened?" — you’re not alone.

The S&P 500 dropped over 5%.
The Nasdaq shed more than 6%.
Bitcoin slipped 4%.
And the VIX? It surged over 50, signaling a jump in volatility.

There’s a lot moving behind the scenes. From new tariffs and AI shifts to changes in entertainment exports and cloud investment delays—it’s a global story with real consequences for individual investors.

Let’s break it down.

U.S. Films Face New Limits in China

One of the more attention-grabbing headlines this week: China announced plans to “moderately reduce” the number of U.S. films allowed into its theaters.

This isn’t a full ban, but it does mark a continued pivot toward promoting homegrown content in the Chinese market. In 2018, 63 U.S. films played in Chinese theaters. Last year, that number dropped to 42—and the trend is continuing.

This matters because Hollywood studios depend on international box office performance to make up big-budget production costs. When access narrows, so do earnings.

• Disney shares: -6.1%

• Warner Bros. Discovery: -12%

• Paramount Global: -1.2%

For investors, it’s a good reminder to pay attention not just to content performance—but also to distribution risks and international exposure.

Amazon, AI, and the Chip Cost Revolution

While some sectors are under pressure, others are leaning into innovation.

In a recent shareholder letter, Amazon CEO Andy Jassy emphasized how AI costs are expected to drop in the near future. Specifically, Amazon’s Trainium chips—built in-house at AWS—are projected to offer 30–40% better price-performance than existing GPU-powered systems.

Why that matters:

• AI training is expensive right now.

• Inference (how AI models make real-time predictions) is becoming the bigger slice of the pie.

• Lower costs = faster adoption = more scalable enterprise solutions.

For long-term investors interested in AI infrastructure plays, the takeaway is clear: Watch companies that are building more affordable and efficient AI systems—not just the ones making headlines.

The 90-Day Pause on Tariffs: A Temporary Market Rebound

Markets got a brief breather after the U.S. announced a 90-day pause on certain tariff increases.

Stocks immediately bounced, with tech leading the way:
Apple jumped nearly 10%.
European tech names surged 10–14%, including SAP and ASML.

This pause doesn’t eliminate the broader uncertainty. Tariffs on Chinese goods remain elevated, and China has responded with its own increases.

Regardless of political leanings, what matters for investors is understanding the ripple effect. Trade tensions—regardless of country or administration—can influence:

• Supply chains

• Global revenue streams

• Input costs for tech and manufacturing firms

So this isn’t about short-term politics—it’s about long-term positioning.

AI and Cloud Investment: Signs of a Slowdown

Amid the tariff noise, a quieter trend is emerging. Analysts from Wedbush estimate that 10–15% of cloud and AI initiatives in the U.S. could be delayed due to uncertainty around tariffs and cost structures.

Microsoft, despite a recent rally, saw its price target trimmed from $550 to $475, citing these very concerns.

Slower investment in AI doesn’t mean AI is going away. But it does mean companies with diversified income streams and efficient R&D spending may weather this phase better than pure growth names with heavy capital needs.

Investors focused on AI should be watching not just innovation speed—but capital efficiency and resilience.

What’s Outperforming Right Now?

A few bright spots stood out in this week's data:

• European tech stocks got a boost from suspended tariffs.

• Telecom and utility sector credit in Europe is attracting investors looking for tariff insulation and attractive spreads.

• The U.S. housing market is showing signs of loosening. Inventory is up 28.5% year-over-year, giving buyers more leverage—even as mortgage rates remain high.

These are areas that may provide more stability in portfolios while the broader market digests macroeconomic uncertainty.

Smart Moves Investors Can Make in a Volatile Market

Here are some strategic shifts to consider:

1. Reassess international exposure. Especially in sectors like entertainment and hardware, where trade restrictions may impact revenue streams.

2. Look for infrastructure over hype. AI is here to stay—but platforms building the cost-saving backend (like Amazon’s AWS) may offer more durability than consumer-facing AI startups.

3. Diversify geographically. U.S.-centric portfolios may benefit from exposure to markets less affected by current trade friction.

4. Stay adaptive with automation. Volatile markets are tough to time. Platforms that automate investing with real-time strategy execution (like Surmount) can help navigate rapid shifts without emotional decision-making.

Final Thoughts

Whether you're bullish or bearish on the global outlook, this much is clear: Trade policy, tech innovation, and AI infrastructure are all colliding—and fast.

The best investors aren’t reacting emotionally. They’re adjusting logically. They're using tools, data, and tested strategies to stay ahead of the curve.

In times like this, being thoughtful and flexible is more important than ever.

The information presented is for educational purposes only and not an offer or solicitation for any specific investments. Investments involve risk and are not guaranteed. Consult with a financial adviser before making any investment decisions. Past performance does not guarantee future results.