WASHINGTON — Tariff exemptions announced Friday for electronics such as smartphones and laptop computers are only temporary until the Trump administration develops a new tariff strategy tailored to the semiconductor industry, according to U.S. Commerce Secretary Howard Lutnick on Sunday.
White House officials, including President Donald Trump, spent Sunday downplaying the importance of exemptions that reduce but do not eliminate the impact of U.S. tariffs on imports of popular consumer devices and key components.
“They’re exempt from the reciprocal tariffs but they’re included in the semiconductor tariffs, which are coming in probably a month or two,” Lutnick, of ABC, told “This Week” the following day.
Hours later, Trump exacerbated the confusion by declaring on social media that there was no “exception” because the goods were “just moving to a different” bucket and would still face a 20% tariff as part of his administration’s move to punish China for its role in fentanyl trafficking.
The Trump administration announced late Friday that electronics would be excluded from broader so-called reciprocal tariffs, a move that could help keep prices low for phones and other consumer products not typically made in the United States.
In a statement issued on Sunday, China’s commerce ministry welcomed the change as a small step, while also urging the United States to completely eliminate the rest of the tariffs.
Sparing electronics was expected to benefit big tech companies like Apple and Samsung, as well as chip makers like Nvidia, but the uncertainty of future tariffs may dampen an anticipated tech stock rally on Monday.
According to US Customs and Border Protection, smartphones, laptops, hard drives, flat-panel monitors, and some chips will be exempt. Machines used to make semiconductors are also excluded. That means they will not be subject to the majority of the tariffs imposed on China, as well as the 10% baseline tariff elsewhere.
It was the latest tariff change by the Trump administration, which has reversed course on its massive plan to impose tariffs on goods from most countries. As the weekend progressed, White House officials sought to dismiss any suggestions of a reprieve.
“This isn’t really an exception. “That isn’t even the right word for it,” U.S. Trade Representative Jamieson Greer told CBS’ “Face the Nation” on Sunday. “This type of supply chain moved from the tariff regime for the global tariff, the reciprocal tariff, and it moved to the national security tariff regime.”
Greer went on to say, “The president has decided that there will be no exemptions. We cannot have a Swiss cheese solution to this universal problem.”
On Air Force One Saturday night, President Donald Trump told reporters that he would provide more specifics on exemptions on Monday. In his Sunday TruthSocial post, he promised that the White House was “looking into semiconductors and the entire electronics supply chain.”
Some had assumed that the exemption filed Friday night reflected the president’s recognition that his tariffs on China are unlikely to shift more smartphone, computer, and other gadget manufacturing to the United States anytime soon, if at all.
The administration predicted that the trade war would prompt Apple to manufacture iPhones in the United States for the first time, but this was an unlikely scenario after Apple spent decades developing a finely tuned supply chain in China.
Building new plants in the United States would take several years and cost billions of dollars, putting Apple under economic pressure that could triple the price of an iPhone and stifle sales of its flagship product.
The turmoil has hammered the stocks of technology’s “Magnificent Seven” — Apple, Microsoft, Nvidia, Amazon, Tesla, Google parent Alphabet, and Facebook parent Meta Platforms.
At one point, the Magnificent Seven’s combined market value had fallen by $2.1 trillion, or 14%, since April 2, when Trump announced broad tariffs on a variety of countries. When Trump paused tariffs outside of China on Wednesday, the lost value in those companies was reduced to $644 billion, a 4% drop.
An electronics exemption would provide the industry with the favorable treatment it envisioned when Apple CEO Tim Cook, Tesla CEO Elon Musk, Google CEO Sundar Pichai, Facebook founder Mark Zuckerberg, and Amazon founder Jeff Bezos gathered behind the president during his Jan. 20 inauguration.
That show of unity reflected Big Tech’s expectations that Trump would be more accommodating than President Joe Biden’s administration.
Trump praised Apple in late February after the Cupertino, California-based company committed to investing $500 billion and creating 20,000 jobs in the United States over the next four years. The pledge echoed Apple’s $350 billion investment commitment in the United States during Trump’s first term, when the iPhone was exempt from Chinese tariffs.
An electronics exemption would lift “a huge black cloud overhang for now over the tech sector and the pressure facing U.S. Big Tech,” according to Wedbush analyst Dan Ives in a research note. After Lutnick’s comments on Sunday, Ives amended his note, stating that the White House’s confusing news “is dizzying for the industry and investors and creating massive uncertainty and chaos for companies trying to plan their supply chain, inventory, and demand.”