Following the near-universal about-face regarding the countries affected by the tariffs, the focus is now on specific exemptions for electronic products. Although Donald Trump previously excluded all countries except China from the application of reciprocal tariffs, a waiver will now apply to consumer electronics, such as smartphones and computers.
Semiconductors spared for now
Reciprocal tariffs do not apply to smartphones, computers, memory cards, and flat-panel displays. In practice, these items would not be affected by the tariffs imposed on China, nor by the minimum 10% rate applied to all other countries.
The exemption is also expected to apply to machinery used in semiconductor manufacturing. However, it is possible that these categories could later be subject to separate tariffs.
A measure that benefits Apple and Samsung
This decision will be beneficial for American consumers as well as major electronics companies such as Apple and Samsung. The introduction of the tariffs caused Apple’s stock to fall by nearly 30% from the previous week’s level.
The tariffs imposed by China represent a considerable threat to Apple. The iPhone, which is the main engine of the company’s expansion, is heavily dependent on Chinese assemblers, as the majority of iPhones are shipped from China. Relocating production to the United States in the short term was impossible. In this context, keeping the phone’s price around 1,000 USD was a real challenge.
Recently, Apple stepped up “urgent shipments” from India to bring tens of thousands of iPhones back to the United States.
Mixed Reactions
The business community and Silicon Valley welcomed this exemption with relief, but economists remain divided on the long-term effectiveness of these customs policies. The IMF estimates that the US-China trade war cost up to 0.4% of global growth between 2018 and 2020.
For China, these new tariff threats are seen as a political escalation. The Chinese Ministry of Commerce stated that it is monitoring the situation closely and reserves the right to react.
