WASHINGTON: In a significant policy shift, former President Donald Trump’s administration has granted tariff exemptions on a range of electronics—primarily imported from China—providing a massive break to major tech companies such as Apple, Dell, and Nvidia.
The U.S. Customs and Border Protection (CBP) issued a notice exempting 20 product categories from reciprocal import taxes, including smartphones, laptops, memory chips, semiconductors, and flat panel displays. The exclusions are retroactive to April 5, 2025, offering welcome relief to tech firms burdened by soaring import costs amid Trump’s aggressive tariff campaign.
These products were previously subjected to steep reciprocal tariffs of up to 125%, part of Trump’s broader economic strategy to rebalance global trade, especially with China. The decision to exclude these electronics appears to be a tactical move to shield U.S. consumers and companies from further price shocks.
Impact on Consumers & Inflation
The move is widely seen as a response to concerns over inflation and potential recession risks. Analysts warned that even with a 54% tariff rate, the price of an iPhone could rise from $1,599 to $2,300, worsening the financial pressure on American consumers. With tariffs at 125%, analysts said trade with China could “virtually halt.”
Market Reactions and Industry Response
Dan Ives, an analyst at Wedbush Securities, hailed the exemptions as “the most bullish news we could have heard this weekend,” suggesting it could stabilize tech stocks and cool market jitters.
U.S. stocks ended the week higher despite volatility, but gold hit record highs, and 10-year Treasury yields surged, showing continued investor unease. The dollar also slumped, reflecting diminishing confidence in U.S. economic policy.
Trade War Escalation with China
China retaliated with its own 125% tariffs on U.S. goods, intensifying the ongoing trade war and threatening global supply chains. Nevertheless, Trump downplayed market turbulence, stating, “I’m comfortable with high tariffs,” and emphasized his “good relationship” with Chinese President Xi Jinping.
Smartphones were the top U.S. import from China in 2024, totaling $41.7 billion, followed by Chinese-built laptops at $33.1 billion, according to the U.S. Census Bureau. Apple, in response, has significantly scaled up production in India and recently chartered cargo flights to transport 1.5 million iPhones to the U.S. to beat tariff deadlines.
National Security Justification
While offering temporary relief, the White House signaled that further national security investigations into semiconductor supply chains are on the horizon. A senior official confirmed Trump intends to launch a new probe that could lead to additional restrictions or tariffs.
White House spokesperson Karoline Leavitt reaffirmed Trump’s stance: “America cannot rely on China for critical technologies. That’s why companies like Apple, Nvidia, and Taiwan Semiconductor are working to onshore production in the U.S.”
Political Calculations & Economic Balancing
Trump’s dual goal of fighting inflation while pushing an aggressive tariff agenda reflects a high-stakes balancing act. While some Republicans support the strategy, others worry it could hurt the party in the upcoming midterm elections, giving Democrats ammunition to criticize Trump’s economic policies.
Trump, who is spending the weekend at his Florida residence, remains firm in his approach: “Something positive will come out of this,” he said, referring to his trade negotiations with China.
