Trump administration to exclude smartphones and computers from reciprocal tariffs

The Trump administration late Friday said it would exclude electronics like smartphones and laptops from reciprocal tariffs, a move that could help keep the prices down for popular consumer electronics that aren’t usually made in the U.S.

The move would also benefit big tech companies like Apple and Samsung, and chip makers like Nvidia.

U.S. Customs and Border Protection listed some 20 products that would qualify for the exemption. They include hard drives, memory chips, flat-panel monitors and solid-state storage devices, as well as machines used to make semiconductors.

That means they won’t be subject to the current 145 per cent tariffs levied on China, or the 10 per cent baseline tariffs elsewhere.

Trump previously said he would consider exempting some companies from tariffs.

The move takes off “a huge black cloud overhang for now over the tech sector and the pressure facing U.S. Big Tech,” said Wedbush analyst Dan Ives in a research note.

Trump’s reciprocal tariffs have raised fears of a U.S. recession and drawn criticism from his fellow Republicans, who do not want to lose control of the U.S. House of Representatives and Senate to Democrats in next year’s midterm elections.

Neither Apple nor Samsung responded to a request for comment early Saturday. Nvidia declined to comment.

The notice did not provide an explanation for the Trump administration’s move and White House officials did not immediately reply to a request for comment on why the latest tariff exemptions had been made.

Trump ran for re-election last year largely on a promise to bring down prices, which, fuelled by inflation from the pandemic and Russia’s war in Ukraine, had tarnished the economic reputation of then-president Joe Biden and his Democratic allies.

But Trump also promised as a candidate to impose the tariffs that have become a central part of his economic agenda, and the U.S. president has dismissed the turbulence in financial markets and expected price increases arising from the levies as a disturbance that was a necessary part of realigning the global economy and world trading order with his vision.

Apple has manufactured most of its iPhones in China since the first model hit the market 18 years ago.

“The concept of making iPhones in the U.S. is a non-starter,” said Ives, reflecting a widely held view in the investment community that tracks Apple’s every move.

The disincentives for Apple shifting its production domestically include a complex supply chain that it began building in China during the 1990s.It would take several years and cost billions of dollars to build new plants in the U.S., and then confront Apple with economic forces that could triple the price of an iPhone, threatening to torpedo sales of its marquee product.

Ives estimated that the current $1,000 US price tag for an iPhone made in China, or India, would soar to more than $3,000 if production shifted to the U.S. And he says he believes that moving production domestically likely couldn’t be done until, at the earliest, 2028.