President Trump has temporarily made certain tech products exempt from his ongoing tariffs, following an announcement late last Friday that included a list of 20 electronic devices including computers, smartphones, laptops, hard drives, and machines that make semiconductors.
China, where major tech players Apple and Dell partially manufacture, has been the worst hit by the tariffs, currently enduring a figure of 125% on top of a baseline 20%. Since then, Trump has paused his new tariffs for 90 days excluding China, and China has hit back with its own 125% tariff on American goods.
Despite the exemption, the tech industry is not yet out of the woods. Spokespeople for the White House have made it clear that tech companies should look to manufacture in the US. Trump also continues to hold investigations on semiconductors, which will certainly bear the brunt of tariffs of their own.
Trump Administration Includes Tech Products on Tariff-Exemption List, For Now
The Trump Administration has included 20 tech products on a list of product categories that are excluded from his latest round of tariffs. Laptops, smartphones, hard drives, and machines that make semiconductors are amongst the products, as well as modems, routers, flash drives, and other technology goods which are largely made outside the U.S.
These products are exempt from both the 125% tariff and 20% baseline tariff on goods from China, and the universal baseline tariff of 10% elsewhere.
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With many tech companies manufacturing in China, the Chinese commerce ministry has reacted positively to the news of the exemptions, calling it a “small step” that Beijing is “evaluating” in its impact. Although, the move’s temporary nature could fail to improve trade relations between the two sides.
Momentary Relief for the Tech Industry Following Tariff Exemption
Tech companies have already began to suffer as a result of the tariffs, with Apple having lost $773 billion of its valuation a week after the tariffs were announced. No doubt tech leaders, particularly those closest to the President, therefore see this exemption as a temporary relief, as many continue to manufacture outside of the U.S.
The move could be seen as a partial de-escalation of Trump’s trade war with China, as the 20 product types listed in the announcement account for nearly a quarter of U.S. imports from China, according to Paul Ashworth, the chief North America economist for Capital Economics.
On the part of the White House, however, this move appears to be temporary. Karoline Leavitt, the White House spokeswoman, has said that President Trump has “made it clear America cannot rely on China to manufacture critical technologies.” Therefore, he is encouraging tech companies to “onshore their manufacturing in the United States as soon as possible.”
Is Tech Completely Safe From the Tariffs?
Trump’s tech exemption could signal that his love affair with Silicon Valley is still in its honeymoon phase, however this doesn’t seem likely, as the President lamented on social media platform Truth Social that the White House continues to look into semiconductors and the entire electronics supply chain.
US Commerce Secretary Howard Lutnick has since confirmed suspicions that tech is still in danger of high tariffs, suggesting that these exempt products would be included in a list of semiconductor tariffs, which we can expect to see in a month or two.
“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.” Howard Lutnick, U.S. Commerce Secretary.
Therefore, all evidence points to more tariffs impacting the tech industry in the near future, and we will no doubt witness more industries suffer.
