Smartphones and computers exempt from Trump's new tariffs

Smartphones and computers exempt from Trump's new tariffs

According to a current one Notice from US Customs and Border Protection Electronic products imported into the United States are exempt from President Donald Trump's reciprocal tariffs. This regulation affects, among other things, smartphones, computer screens and various electronic components and applies to products that enter the USA or are removed from warehouses from April 5th.

Effects of tariff exemption on the electronics industry

This action comes in the context of the imposition of a minimum tariff of 145% on goods from China imported into the United States. The tariffs have had a significant impact on tech giants like Apple, which make iPhones and other products in China. Wedbush Securities estimates that around 90% of iPhone production and assembly takes place in China.

Reactions from analysts and companies

Analysts at Wedbush called the tariff exemption “the best news for tech investors.” They stated: "Big tech companies like Apple, Nvidia, Microsoft, as well as the entire tech industry, can take a deep breath this weekend until Monday. This is a big step for US tech to get these exemptions and the most optimistic news we could have heard this weekend. Now comes the next step in negotiations on the broader tariff war with China, which will take at least several months to complete."

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

Impact on the smartphone market

Research firm Counterpoint Research, which tracks global smartphone shipments, estimated that Apple has up to six weeks of supply in the United States. Once this supply is exhausted, one could expect prices to rise.

US government is pushing to relocate production

The White House said Saturday that Trump continues to push tech companies to move production to the United States. "President Trump has made clear that America cannot rely on China to produce critical technologies like semiconductors, chips, smartphones and laptops. That's why the President has secured trillions of dollars in U.S. investments from the world's largest tech companies, including Apple and Nvidia. At the President's direction, these companies are moving to move their production to the United States as quickly as possible," said White House Press Secretary Karoline Leavitt.

Price increases due to tariffs are feared

Economists warn that the costs of tariffs could ultimately be passed on to consumers. That concern has led many Americans to rush big purchases like cars and electronics while consumer sentiment has fallen to record lows.

On April 4, Nintendo announced that it would postpone the pre-order date for its Switch 2 console in the US to assess the potential impact of tariffs and evolving market conditions. According to experts, instead of the initially planned price of $450, the Switch 2 could cost around $600 due to the tariffs.

Strategies for US competitiveness

The Trump administration claims that these tariffs would bring more manufacturing jobs to the United States and reverse a decades-long decline. However, there are products that cannot be easily manufactured or sourced in the United States, increasing production costs in American factories.

Semiconductors and microchips are examples of products whose manufacturing has been heavily offshored due to lower costs. These electronic components are now exempt, according to Friday's advisory, which could benefit Asian chipmakers such as Taiwan Semiconductor Manufacturing Company (TSMC), South Korea's Samsung and SK Hynix.

Future studies and policies

A White House official said Trump would soon order a study on the national security effects of semiconductor imports - known as a Section 232 study.

At a Republican National Convention Committee event, Trump criticized the Biden administration's decision to give TSMC a $6.6 billion grant for semiconductor production in Phoenix under the CHIPS and Science Act of 2022. "I didn't give TSMC any money and I told the company, 'If you don't build your plant here, you're going to pay a lot of taxes - 25%, maybe 50%, maybe 75%, maybe 100%,'" Trump said.

This article has been updated with additional content.