NASHVILLE, Tenn. (AP) — The Trump administration late Friday said it would exclude electronics like smartphones and laptops from reciprocal tariffs, a move that could help keep the prices down for popular consumer electronics that aren’t usually made in the U.S.
It would also benefit big tech companies like Apple and Samsung and chip makers like Nvidia, setting the stage for a likely tech stock rally on Monday.
U.S. Customs and Border Protection said items like smartphones, laptops, hard drives, flat-panel monitors and some chips would qualify for the exemption. Machines used to make semiconductors are excluded too. That means they won’t be subject to the current 145% tariffs levied on China or the 10% baseline tariffs elsewhere.
It’s the latest tariff change by the Trump administration, which has made several U-turns in their massive plan to put tariffs in place on goods from most countries.
The exemption seemed to reflect the president’s realization that his China tariffs are unlikely to shift more manufacturing of smartphones, computers and other gadgets to the U.S. any time soon, if ever, despite the administration’s predictions that the trade war prod Apple to make iPhones in the U.S. for the first time.
But that was an unlikely scenario after Apple spent decades building up a finely calibrated supply chain in China. What’s more, It would take several years and cost billions of dollars to build new plants in the U.S., and then confront Apple with economic forces that could triple the price of an iPhone, threatening to torpedo sales of its marquee product.
Trump’s decision to exempt the iPhone and other popular electronics made in China mirrors the similar relief that he gave those products during the trade war of his first term in the White House. But Trump began his second term seemingly determined to impose the tariffs more broad this time, triggering a meltdown in the market values of Apple and other technology powerhouses.
The turmoil battered the stocks of tech’s “Magnificent Seven” — Apple, Microsoft, Nvidia, Amazon, Tesla, Google parent Alphabet and Facebook parent Meta Platforms. At one point earlier this week, the combined Magnificent Seven’s combined market value had plunged by $2.1 trillion, or 14%, from April 2 when Trump unveiled sweeping tariffs on a wide range of countries.
Some of the losses eased this past Wednesday when Trump paused the tariffs outside of China, paring the lost value in the Magnificent Seven to $644 billion, or a 4% decline, from April 2. Now, the stage is set for another tech rally Monday when trading resumes in the U.S. stock market, with Apple likely leading the way because the iPhones made in China remain the company’s biggest money maker.
