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The Trump administration has excluded smartphones and other consumer electronics from its steep “reciprocal” tariffs in a significant boost for Big Tech as the White House battles to calm global markets after launching a multifront trade war.
According to a notice posted late on Friday night by Customs and Border Patrol, smartphones, along with routers, chipmaking equipment, wireless earphones and certain computers and laptops, would be exempt from reciprocal tariffs, which include the 125 per cent levies Donald Trump has imposed on Chinese imports.
The carve-out is a big win for companies such as Apple, Nvidia and Microsoft, and follows a week of intense turbulence in US markets after Trump unleashed a trade war on “liberation day” on April 2. The announcement rattled global investors and triggered a stock market rout.
The exemption is the first sign of any softening of Trump’s tariffs against China, which he ratcheted up over the course of the past week even as he paused the steepest “reciprocal” tariffs. He retained tariffs of 10 per cent on most trading partners.
The Trump administration had already exempted several sectors from its reciprocal tariffs, including semiconductors and pharmaceuticals, but the president has signalled that he still plans to apply tariffs to those sectors.
A White House official said on Saturday that the US would launch a separate probe that could lead to a tariff on chips “soon”.
The dispensation for smartphones and computers will be especially welcomed by Apple as the bulk of its supply chain is centred on China. Analysts estimate about 80 per cent of its iPhones are still made in the country even as the tech group worked to diversify production to India in recent years.
The majority of iPhones are made in a big factory complex in Zhengzhou operated by Apple’s manufacturing partner Foxconn. Workers at the plant told the Financial Times this week that operations were normal but that they were worried about the impact of the trade war.
Shares in the US tech giant were one of Wall Street’s biggest casualties in the days immediately after Trump announced his reciprocal tariffs. About $700bn was wiped off Apple’s market value in the space of a few days.
Earlier this week, Trump said he would consider excluding US companies from his tariffs, but added that such decisions would be made “instinctively”.
Chad Bown, a senior fellow at the Peterson Institute for International Economics, said the exemptions mirrored exceptions for smartphones and consumer electronics issued by Trump during his trade wars in 2018 and 2019.
“We’ll have to wait and see if the exemptions this time around also stick, or if the president once again reverses course sometime in the not-too-distant future,” said Bown.
US Customs and Border Protection referred inquiries about the order to the US International Trade Commission, which did not immediately reply to a request for comment.
The White House confirmed that the new exemptions would not apply to the 20 per cent tariffs on all Chinese imports applied by Trump to respond to China’s role in fentanyl manufacturing.
White House spokesperson Karoline Leavitt said on Saturday that companies including Apple, TSMC, and Nvidia were “hustling to onshore their manufacturing in the United States as soon as possible” at “the direction of the President”.
“President Trump has made it clear America cannot rely on China to manufacture critical technologies such as semiconductors, chips, smartphones, and laptops,” said Leavitt.
Apple declined to comment.
Economists have warned that the sweeping nature of Trump’s tariffs — which apply to a broad range of common US consumer goods — threaten to fuel US inflation and hit economic growth.
New York Fed chief John Williams said US inflation could reach as high as 4 per cent as a result of Trump’s tariffs.
Additional reporting by Michael Acton in San Francisco
