The Trump administration has suspended a tariff increase of 125% on major electronic goods coming from China. This is good news for many tech stocks such as Apple and NVIDIA, some of Wall Street’s largest companies.
Smartphones, laptops, PCs, servers, memory chips, flat-panel displays, solar cells and hard drives are exempt from the additional tariff on Chinese goods, yet a 20% levy will remain on them, which is still likely to push prices higher for consumers.
Yet some tech companies have already made other plans to avoid such a tax hike.
According to Reuters, Apple has flown 600 tonnes of iPhones into the U.S. from India since March alone (roughly 1.5 million handsets) after ramping up production at its India plants.
The measure will cover ~US$385 billion worth of 2024 imports - 12% of the total and almost a quarter from China.
Trump's backtrack came after pressure from Republican leaders concerned that the significant soaring costs of items such as smartphones (U.S. retailers import about 80% of them) would spark a voter backlash, as many come from China.
The U.S. President, speaking on Air Force One on Saturday evening, said he would be more specific about the latest exemption rules later today.
“We’ve been making a lot of money,” he said. “It’s been the other way around. Other countries, in particular China, was making a lot of money.”
Temporary relief
Yet Wall Street billionaire-cum-U.S. Commerce Secretary Howard Lutnick has poured water on the exemption, stating that the reprieve may only be temporary.
Lutnick says semiconductors from China would be subject to a special "semiconductor tariff" that will likely come “in a month or two”, appearing on ABC's This Week.
"All those products are going to come under semiconductors, and they're going to have a special focus type of tariff to make sure that those products get reshored.
"We need to have semiconductors, we need to have chips, and we need to have flat panels -- we need to have these things made in America.
“We can't be reliant on Southeast Asia for all of the things that operate for us.”
