Smartphones and computers are now exempt from Trump’s latest tariffs

People look at a new iPhone 16 series at an Apple Store in Palo Alto, California, on Sept. 20, 2024. (Tayfun Coskun/Anadolu via Getty Images via CNN Newsource)

Electronics imported to the United States will be exempt from U.S. President Donald Trump’s reciprocal tariffs, according to a U.S. Customs and Border Protection notice posted late Friday.

Smartphones, computer monitors and various electronic parts are among the exempted products. The exemption applies to products entering the United States or removed from warehouses as early as April 5, according to the notice.

The exemption, which comes after the Trump administration on Wednesday imposed a minimum tariff rate of 145 per cent on Chinese goods imported to the United States, does not include the 20 per cent tariff on Chinese goods for the country’s role in the fentanyl trade. The tariff exemption would have a major impact on tech giants like Apple, which make iPhones and other products in China.

Roughly 90 per cent of Apple’s iPhone production and assembly is based in China, according to Wedbush Securities’ estimates.

Analysts at Wedbush on Saturday called the tariff exclusion, “the best news possible for tech investors.”

“Big Tech firms like Apple, Nvidia, Microsoft and the broader tech industry can breathe a huge sigh of relief this weekend into Monday,” Wedbush said in a statement. “A big step forward for U.S. tech to get these exemptions and the most bullish news we could have heard this weekend…now onto the next step in negotiations on the broader China tariff war which will take a number of months at least.”

Nvidia and Microsoft declined to comment to CNN. Apple did not immediately respond to a request for comment.

Counterpoint Research, a firm that monitors global smartphone shipments, estimated Apple has up to six weeks of inventory in the United States. Once that supply runs out, prices would have been expected to go up.

The White House said on Saturday that Trump will continue to urge tech companies to move production to the United States.

“President Trump has made it clear America cannot rely on China to manufacture critical technologies such as semiconductors, chips, smartphones, and laptops. That’s why the President has secured trillions of dollars in U.S. investments from the largest tech companies in the world, including Apple, (Taiwan Semiconductor Manufacturing Company), and Nvidia. At the direction of the President, these companies are hustling to onshore their manufacturing in the United States as soon as possible,” White House press secretary Karoline Leavitt said in a statement.

Trump had told reporters Friday on Air Force One that there could be possible exclusions to his sweeping tariffs.

“There could be a couple of exceptions for obvious reasons, but I would say 10 per cent is a floor,” Trump said.

Economists have warned the cost of tariffs may ultimately be passed on to the consumer. That fear has sent many Americans rushing to buy big-ticket items, such as cars and electronics, as consumer sentiment has dropped to record lows.

Nintendo said on April 4 that it would postpone the U.S. preorder date of its Switch 2 gaming console to “assess the potential impact of tariffs and evolving market conditions.” Initially priced at US$450, the Switch 2 could instead cost around $600 as a result of tariffs, according to experts.

The Trump administration says these tariffs would bring more manufacturing jobs to the United States and reverse a decades-long decline. But some products can’t be easily made or found in the United States, thus increasing the costs to produce them in American factories.

Semiconductors and microchips are among the products heavily outsourced to factories in Asia due to lower costs. Those electronic parts are now exempt, according to the Friday notice. That could help Asian chipmakers, such as Taiwan Semiconductor Manufacturing Company (TSMC), South Korea’s Samsung and SK Hynix.

“The president has stated that autos, steel, pharmaceuticals, chips and other specific materials will be included in specific tariffs to ensure tariffs are applied fairly and effectively,” a White House official said.

The official said Trump would soon order a study on the national security effects on semiconductor imports — known as a Section 232 study.

At a Republican National Congressional Committee event on Tuesday, Trump criticized the Biden administration’s decision to award a $6.6 billion grant to TSMC for semiconductor production in Phoenix as part of the 2022 CHIPS and Science Act. Trump said he gave TSMC no money and told the company “if you don’t build your plant here, you’re going to pay a big tax — 25, maybe 50, maybe 75, maybe 100 per cent.”

CNN’s Kevin Liptak and Lisa Eadicicco contributed to this report.

Article by Auzinea Bacon.