The Cost of the A.I. Boom: A Trade Deficit the President Detests - The New York Times

The rise of artificial intelligence has become a force propelling the economy and the stock market. But it is also fueling the U.S. trade deficit, as tech companies import expensive foreign computers and chips to fill their new data centers.

Unlike cars, steel and other goods, electronics were intentionally spared by Mr. Trump. Last April, the administration issued an exemption from tariffs for smartphones, computers, semiconductors and other electronics. It was a significant break for tech companies, like Apple, Nvidia and Dell, that have lobbied the president against broad tariffs.

The tariff exemption has increased demand for imports of computers, semiconductors and other equipment. So has rapid data center construction around the United States.

The A.I. boom has helped to prop up an otherwise lackluster U.S. economy. It is also powering growth in the stock market, which Mr. Trump has long seen as a metric of his administration’s success. Over the past three years, America’s largest tech stocks — a group known as the Magnificent Seven — have been responsible for more than half of the 88 percent gain in the S&P 500.