Smartphones spared: Trump announces major tariff exemptions

President Donald Trump has excluded smartphones and some electronics from the tariffs he imposed on Chinese imports.

Donald Trump has excluded smartphones from the tariffs he imposed on Chinese imports into America, amid escalating trade wars.

The US Customs and Border Protection agency has now announced a range of electronic goods, including some laptops, memory cards, smartphones, semiconductors and solar cells, would not be subject to Trump’s tariffs, which have wreaked havoc on the stock market since they were first announced on April 2.

The agency said electronics won’t be charged under the reciprocal tariffs of 145 per cent. Instead, they will fall under the ten per cent universal tariff that faces all goods flowing into the US.

President Donald Trump talks to reporters on board Air Force One over the weekend. Picture: AP

The tech sector suffered a large sell-off due to concerns that tariffs would disrupt supply chains that extend to East Asia.

President Trump described it as “liberation day” when he announced sweeping plans to impose 10 per cent tariffs in all US imports, along with additional “reciprocal” levies on East Asian countries that have a large trade surplus with the US. Cambodia and Vietnam were facing tariffs nearing 50 per cent.

The announcement triggered volatility in stock markets across the world and caused a sell-off in US government bonds. Investment banks were also predicting a world recession.

The turmoil forced Trump into retreat as he announced that the reciprocal charges would be delayed by three months. Yet he increased the tariffs on China, which now stand at 145 per cent, as Beijing levied 125 per cent retaliatory tariffs on US goods.

CHINA WILL IGNORE FURTHER US TARIFF HIKES

US stocks fell on Friday local time (Saturday morning AEST) as China struck back at President Trump’s latest tariff with a total 125 per cent tax — further escalating trade tensions between the two nations.

The Dow Jones Industrial Average lost 254 points, or 0.6 per cent, after plummeting 1,014.79 the day before.

The index has been on a wild ride over the past week as markets struggle to absorb back-and-forth trade war news, plunging more than 4,000 points after Trump revealed his so-called “reciprocal” tariffs last Wednesday, then recovering more than 1,500 points this week after he announced a 90-day pause on most of his harsher tariffs.

People stand outside iconic US brand Polo Ralph Lauren’s store in the busy Sanlitun commercial area in Beijing, China. Picture: Getty Images

The S&P 500 and Nasdaq dipped 0.5 per cent and 0.2 per cent, respectively, Friday morning.

China’s move to hike tariffs to 125 per cent marks its third retaliatory effort against the US, after Mr Trump most recently announced a 125 per cent tax on the nation, blaming Beijing’s “lack of respect.”

The White House later confirmed the total tariff on China was 145 per cent, after stacking on top of earlier levies.

Mr Trump appeared unconcerned by the development, posting cheerily about the negotiations to Truth Social.

“We are doing really well on our TARIFF POLICY. Very exciting for America, and the World!!! It is moving along quickly,” Mr Trump wrote.

Traders work on the floor of the New York Stock Exchange in the wake of China’s latest tariff escalation. Picture: AFP

During a press conference on Saturday AEST, a spokesperson for China’s Ministry of Commerce said the Trump administration’s approach to tariffs was a “numbers game which has no practical significance on economics.”

“It’s become a joke,” the spokesperson continued in a dig at Mr Trump.

However, China also offered a small glimmer of hope for investors fearful the trade war could reheat inflation, hinting it’s not looking to raise rates again in the future.

“If the US continues to impose tariffs on Chinese goods exported to the US, China will ignore it,” the country’s finance ministry said.

This story originally appeared in The New York Post.

Originally published as Smartphones spared: Trump announces major tariff exemptions