Trump administration has excluded smartphones, laptops, and key electronic devices from a planned 125% tariff on Chinese imports.
The decision marks a notable shift in trade policy and offers significant relief to the global tech industry. These products are also excluded from a 10% global tariff, signaling a possible change in U.S.-China trade tensions.
According to U.S. Customs and Border Protection, the exclusions are retroactive from April 5 and apply to various consumer and enterprise technology. Items covered include smartphones, laptop computers, CPUs, GPUs, memory chips, hard drives, and solid-state drives. These devices form the core of both daily consumer usage and advanced computing systems.
Relief for the technology sector
The announcement is a major win for the global technology sector, especially for companies relying on complex international supply chains. Apple Inc. benefits significantly, as the exemption protects iPhones, iPads, Apple Watches, and Airtags. However, AirPods remain subject to tariffs. Apple had previously warned that increased tariffs would increase U.S. consumers’ prices and reduce company profits.
Nvidia Corp. also stands to gain. Its chips, vital for AI and cloud computing, are mostly produced in Taiwan and Mexico. These exemptions also extend to AI chips and servers, which are crucial to artificial intelligence and cloud technology infrastructure. Their absence from earlier exemption lists had raised concerns among tech leaders.
Semiconductor manufacturing gets a boost
The updated exemption list includes equipment used in semiconductor manufacturing, boosting companies like ASML Holding NV and Tokyo Electron Ltd. These firms supply the tools necessary for building advanced chip factories. The move supports the U.S. objective to expand domestic chip production under the CHIPS and Science Act of 2022. Intel, TSMC, and Samsung are working on establishing or enlarging chip facilities across the United States.
This decision could reduce short-term challenges for these companies as they expand operations and invest in local production.
Temporary win amid ongoing uncertainty
The relief provides temporary comfort to businesses but leaves many questions unanswered. A previous order protects these products but does not defend them against potential future duties. The 20% China-directed fentanyl-specific duty remains active independently. Analysts are implementing new targeted tariffs, including those focused on semiconductor and AI sectors. The new targeted tariffs are slightly better than the initial 125% but will nevertheless impact prices. Industry executives support the adjustive trade strategy while the long-term trade strategy remains uncertain.