Nashville: Tariff exemptions announced Friday on electronics like smartphones and laptops are only a temporary reprieve until the Trump administration develops a new tariff approach specific to the semiconductor industry, US Commerce Secretary Howard Lutnick said Sunday.
“They’re exempt from the reciprocal tariffs, but they’re included in the semiconductor tariffs, which are coming in probably a month or two,” Lutnick told ABC’s “This Week” Sunday.
President Donald Trump added to the confusion hours later, declaring on social media that there was no “exception” at all because the goods are “just moving to a different” bucket and will still face a 20 per cent tariff as part of his administration’s move to punish China for its role in fentanyl trafficking.
The Trump administration late Friday had said it would exclude electronics from broader so-called reciprocal tariffs, a move that could help keep the prices down for popular consumer devices that aren’t usually made in the US
The move was expected to benefit big tech companies like Apple and Samsung and chip makers like Nvidia, though the uncertainty of future tariffs may rein in an expected tech stock rally Monday.
US Customs and Border Protection said items like smartphones, laptops, hard drives, flat-panel monitors and some chips would qualify for the exemption. Machines used to make semiconductors are excluded too. That means they won’t be subject to most of the tariffs levied on China or the 10 per cent baseline tariffs elsewhere.
It’s the latest tariff change by the Trump administration, which has made several U-turns in its massive plan to put tariffs in place on goods from most countries. Lutnick’s comments Sunday made clear that more changes were on the way, including a policy specific to the computer chip industry.
On Air Force One Saturday night, President Donald Trump told reporters he would get into more specifics on exemptions Monday. In his Sunday post on TruthSocial, he promised the White House was “taking a look at Semiconductors and the WHOLE ELECTRONICS SUPPLY CHAIN in the upcoming National Security Tariff Investigations.”
Some had assumed the exemption filed Friday night reflected the president’s realization that his China tariffs are unlikely to shift more manufacturing of smartphones, computers and other gadgets to the US any time soon, if ever.
The administration has predicted that the trade war prod Apple to make iPhones in the US for the first time, but that was an unlikely scenario after Apple spent decades building up a finely calibrated supply chain in China.
What’s more, it would take several years and cost billions of dollars to build new plants in the US, and then confront Apple with economic forces that could triple the price of an iPhone, threatening to torpedo sales of its marquee product.
The turmoil has battered the stocks of tech’s “Magnificent Seven” — Apple, Microsoft, Nvidia, Amazon, Tesla, Google parent Alphabet and Facebook parent Meta Platforms.
At one point, the Magnificent Seven’s combined market value had plunged by USD2.1 trillion, or 14 per cent, from April 2, when Trump unveiled sweeping tariffs on a wide range of countries. When Trump paused the tariffs outside of China Wednesday, the lost value in those companies was pared to USD 644 billion, or a 4 per cent decline.
An electronics exemption would fulfill the kind of friendly treatment that industry was envisioning when Apple CEO Tim Cook, Tesla CEO Elon Musk, Google CEO Sundar Pichai, Facebook founder Mark Zuckerberg and Amazon founder Jeff Bezos assembled behind the president during his Jan. 20 inauguration.
That united display of fealty reflected Big Tech’s hopes that Trump would be more accommodating than President Joe Biden’s administration.
Apple won praise from Trump in late February when the Cupertino, California, company committed to investing $500 billion and adding 20,000 jobs in the US during the next four years. The pledge was an echo of a $350 billion investment commitment in the U.S. that Apple made during Trump’s first term when the iPhone was exempted from China tariffs.
The move removes “a huge black cloud overhang for now over the tech sector and the pressure facing U.S. Big Tech,” said Wedbush analyst Dan Ives in a research note. Ives amended that note after Lutnick’s comments Sunday, saying the confusing news out of the White House “is dizzying for the industry and investors and creating massive uncertainty and chaos for companies trying to plan their supply chain, inventory, and demand.”
Neither Apple nor Samsung responded to a request for comment over the weekend.
AP
