On Friday, the U.S. announced tariff exemptions for electronics like smartphones and laptops, but this is only temporary until a new tariff strategy for the semiconductor industry is decided, according to U.S. Commerce Secretary Howard Lutnick on Sunday.
White House officials, including President Donald Trump, downplayed the significance of the exemptions, which reduce but do not remove the impact of U.S. tariffs on popular consumer devices and their main components.
“They’re exempt from the reciprocal tariffs but they’re included in the semiconductor tariffs, which are coming in probably a month or two,” Lutnick said on ABC’s “This Week” on Sunday.
Trump added some confusion later by stating on social media that there were no “exceptions” at all, explaining that the goods would “just move to a different” category and still face a 20% tariff as part of his administration’s effort to punish China for its role in fentanyl trafficking.
On Friday, the Trump administration said it would exclude electronics from broader reciprocal tariffs, a move that could help lower prices for phones and other consumer products not typically made in the U.S.
China’s commerce ministry welcomed the change on Sunday, calling it a small step, while urging the U.S. to cancel all its tariffs. The exclusion of electronics is expected to benefit major tech companies like Apple, Samsung, and chipmakers like Nvidia, though uncertainty about future tariffs might limit the anticipated boost in tech stock prices on Monday.
The U.S. Customs and Border Protection said items like smartphones, laptops, hard drives, flat-panel monitors, and certain chips would qualify for the exemption. However, semiconductor manufacturing machines are excluded, meaning they won’t be subject to most tariffs on Chinese imports or the 10% baseline tariffs imposed on imports from other countries.
This marks the latest change in the Trump administration’s tariff plans, which have seen several shifts. White House officials tried to downplay any notion of an exemption over the weekend.
“It’s not really an exception. That’s not even the right word for it,” U.S. Trade Representative Jamieson Greer told CBS’ “Face the Nation” on Sunday. “This type of supply chain moved from the tariff regime for the global tariff, the reciprocal tariff, and it moved to the national security tariff regime.”
iPhones on display at a storeGreer added, “The president decided that we’re not going to have exemptions. We can’t have a Swiss cheese solution to this universal problem that we’re facing.”
On Saturday night, President Trump told reporters on Air Force One that more details on exemptions would be released on Monday. On Sunday, he promised on social media that the White House was “taking a look at Semiconductors and the WHOLE ELECTRONICS SUPPLY CHAIN.”
Some had thought the exemption announced on Friday was a recognition by the president that his China tariffs would not push companies like Apple to start manufacturing smartphones, computers, and other gadgets in the U.S. anytime soon.
While the administration had hoped the trade war would encourage Apple to make iPhones in the U.S., that scenario seemed unlikely after Apple spent decades building its supply chain in China. It would take years and cost billions of dollars to set up new U.S. plants, potentially raising the cost of an iPhone and hurting sales.
The uncertainty has hit the stocks of major tech companies, such as Apple, Microsoft, Nvidia, Amazon, Tesla, Google’s parent Alphabet, and Facebook’s parent Meta Platforms. At one point, the combined market value of these “Magnificent Seven” companies dropped by $2.1 trillion, or 14%, after Trump announced tariffs on April 2. When he paused tariffs on countries other than China on Wednesday, the loss in value was reduced to $644 billion, or a 4% drop.
An electronics exemption could provide the kind of favorable treatment the tech industry hoped for when major tech CEOs like Tim Cook of Apple, Elon Musk of Tesla, Sundar Pichai of Google, Mark Zuckerberg of Facebook, and Jeff Bezos of Amazon appeared behind Trump during his January 2020 inauguration.
Apple received praise from Trump in late February for committing to invest $500 billion and add 20,000 jobs in the U.S. over the next four years. This mirrored a $350 billion investment promise Apple made during Trump’s first term, when iPhones were exempted from tariffs on Chinese imports.
According to Wedbush analyst Dan Ives, an electronics exemption would remove a “huge black cloud overhang for now over the tech sector.” However, Ives later updated his analysis after Lutnick’s comments on Sunday, calling the situation “dizzying for the industry and investors,” creating “massive uncertainty and chaos for companies trying to plan their supply chain, inventory, and demand.”
Neither Apple, Samsung, nor Nvidia commented on the matter over the weekend.
