Trump administration to exempt smartphones and computers from tariffs
Donald Trump’s presidential administration has exempted smartphones and computers from the 125% levies imposed on imports from China as well as other reciprocal tariffs, which experts had cautioned might cause electronic consumer prices to dramatically spike in the US.The announcement was made late on Friday in a US Customs and Border Patrol (CBP) notice that said the devices would be excluded from the 10% global tariff that Trump recently imposed on most countries, along with the much heftier import tax on China.The CBP’s notice follows concerns from tech companies that the price of electronics for US consumers might surge with many of them manufactured in China. The notice also contained exemptions for additional electronics and components, such as memory cards, solar cells and semiconductors.The exclusions were applied retroactively to the products under the reciprocal tariffs beginning at 12.01am ET on 5 April, according to the notice.“Importers may request a refund by filing a post summary correction for unliquidated entries, or by filing a protest for entries that have liquidated but where the liquidation is not final because the protest period has not expired,” the CBP said.On Saturday, Trump released a statement of “clarification of exceptions” pertaining to the previous evening’s announcement. Speaking to CNBC, Dan Ives, the global head of technology research at the Los Angeles-based financial services firm Wedbush Securities, said on Saturday: “This is the dream scenario for tech investors … Smartphones, chips being excluded is a game-changer scenario when it comes to China tariffs.”Ives added: “I think ultimately big tech CEOs spoke loudly, and the White House had to understand and listen to the situation that this would have been Armageddon for big tech if it were implemented.”Similarly, Paul Ashworth, Capital Economics’ chief north America economist, said that the tariff exceptions “represent a partial de-escalation of president Trump’s trade war with China”.“There were even bigger winners in Asia, however, since the exemptions apply to all countries – not only China. At a stroke, 64% of US imports from Taiwan are now exempt from the 10% reciprocal tariff, 44% from Malaysia, and almost 30% from both Vietnam and Thailand. Ten to 12% of imports from India, Korea and Mexico will also now be exempt,” Ashworth added.“These exemptions will presumably not be the last either, with the success of Apple’s Tim Cook in getting its smartphones exempted likely to boost the lobbying by firms in other sectors.”Since Trump announced his tariffs, Apple was among the hardest hit tech companies – as 90% of its iPhones are reportedly assembled in China.Invoking imagery associated with the strongest classification for hurricanes, Ives had previously described the Chinese tariffs as a “category 5 price storm for the US consumer”. He added in a note to investors: “The reality is it would take three years and $30bn in our estimation to move even 10% of its supply chain from Asia to the US with major disruption in the process … For US consumers, the reality of a $1,000 iPhone being one of the best made consumer products on the planet would disappear.”According to analysts at the investment bank UBS, costs of iPhones would rise exponentially under Trump’s Chinese tariffs. The price of an iPhone 16 Pro Max (with 256GB of storage) could rise by 79% from $1,199 (£915) to about $2,150 (£1,600), the Guardian reported earlier.In attempts to mitigate the blow of Trump’s tariffs, Apple reportedly chartered cargo flights to transport iPhones from its Indian factories, with Reuters reporting the company having flown 600 tons of iPhones – or approximately 1.5m devices – to the US since March.Meanwhile, China’s Semiconductor Industry Association (CSIA) announced that the country’s “retaliatory” tariffs on US imports were limited to chips made in the US. Chips manufactured in Taiwan and South Korea remain unaffected.According to the CSIA, the “country of origin” for integrated circuits would be determined by the location of the manufacturing facility, not the final packaging or design location, CGTN reportsed. In other words, US chipmakers that outsource manufacturing to other parts of the world are exempt from China’s “retaliatory” tariffs.The latest announcement from the CSIA came as China slapped 125% tariffs on US products on Friday as part of the latest trade-war escalation between the two trade giants. More