Trump to exclude electronics such as smartphones and laptops from tariff list

Nashville: The Trump administration late on Friday (Saturday AEST) said it would exclude electronics such as smartphones and laptops from reciprocal tariffs – a move that could help keep prices down for popular consumer electronics that aren’t usually made in the US.

The move would also benefit big tech companies such as Apple and Samsung and chipmakers such as Nvidia and sets the stage for a likely tech stock rally on Monday.

US President Donald Trump speaking to reporters on board Air Force One on Friday.Credit: AP

The US Customs and Border Protection said items such as smartphones, laptops, hard drives, flat-panel monitors and some chips would now qualify for an exemption to the tariffs. Machines used to make semiconductors are excluded too. 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.

It’s the latest tariff change by the Trump administration, which has made several U-turns in its massive plan to put tariffs in place on goods from most countries.

Meanwhile, in the United Kingdom, the government said on Saturday (Sunday AEST) that it would make an extra £20 billion ($42 billion) available to loan to British exporters in light of the tariffs – 25 per cent for steel, aluminium and cars, and 10 per cent on other goods. The government will also suspend import tariffs on dozens of goods to help British companies weather Trump’s tariff hit, according to The Telegraph (UK).

Trump’s exemption for electronics seems to reflect his realisation that his tariffs on China are unlikely to shift more manufacturing of smartphones, computers and other gadgets to the US any time soon, if ever, despite the administration’s predictions that the trade war would prompt Apple to make iPhones in the US for the first time.

But that was an unlikely scenario after Apple spent decades building a finely calibrated supply chain in China. What’s more, it would take several years and cost billions of dollars to build new plants in the US, and then confront Apple with economic forces that could triple the price of an iPhone, threatening to torpedo sales of its marquee product.

Apple has spent decades building a finely calibrated supply chain in China.Credit: Getty Images

Trump’s decision to exempt the iPhone and other popular electronics made in China mirrors the similar relief that he gave those products during the trade war of his first term in the White House. But Trump began his second term seemingly determined to impose the tariffs more broadly this time, triggering a meltdown in the market values of Apple and other technology powerhouses.

The turmoil battered the stocks of tech’s “magnificent seven”: Apple, Microsoft, Nvidia, Amazon, Tesla, Google parent Alphabet and Facebook parent Meta Platforms. At one point last week, the seven’s combined market value had plunged by $US2.1 trillion, or 14 per cent, from April 2 when Trump unveiled sweeping tariffs on a wide range of countries.

Some of the losses eased when Trump paused the tariffs outside of China, paring the lost value in the magnificent seven to $US644 billion, or a 4 per cent decline, from April 2. Now the stage is set for another tech rally when trading resumes in the US stock market, with Apple probably leading the way because the iPhones made in China remain the company’s biggest moneymaker.

The electronics exemption also should relieve consumer worries that the China tariffs would result in hefty price hikes on smartphones and other devices that have become essential tools of modern living,

It’s the kind of friendly treatment that industry was envisioning when Apple chief executive Tim Cook, Tesla chief executive Elon Musk, Google boss Sundar Pichai, Facebook founder Mark Zuckerberg and Amazon founder Jeff Bezos assembled behind the president during his January 20 inauguration. That united display of fealty reflected Big Tech’s hopes that Trump would be more accommodating than President Joe Biden’s administration and would help propel an already booming industry to even greater heights.

Apple won praise from Trump in late February when the California company committed to invest $US500 billion and add 20,000 jobs in the US during the next four years. The pledge was an echo of a $US350 billion investment commitment in the US that Apple made during Trump’s first term when the iPhone was exempted from China tariffs.

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

Neither Apple nor Samsung responded to a request for comment. Nvidia declined to comment. The White House did not immediately respond to a request for comment on Saturday.

AP

Get a note directly from our foreign correspondents on what’s making headlines around the world. Sign up for our weekly What in the World newsletter.