President Trump's reciprocal tariffs on Chinese goods, including a 145% minimum rate, are exempted for electronics such as smartphones and computer monitors. This exemption, effective from April 5th, significantly impacts tech companies with significant Chinese manufacturing, like Apple. The exemption does not include the 20% tariff on Chinese goods related to the fentanyl trade.
Wedbush Securities analysts hailed the exclusion as positive news for tech investors, providing relief to companies like Apple, Nvidia, and Microsoft. Apple, with about 90% of its iPhone production in China, would have faced potential price increases once its US inventory depleted, as estimated by Counterpoint Research.
The White House maintains its stance on encouraging tech companies to move production to the US and reports securing significant US investments from major tech companies for domestic manufacturing. The administration intends to conduct a Section 232 study on the national security implications of semiconductor imports. President Trump has criticized the Biden administration's funding of TSMC for semiconductor production in Phoenix, while simultaneously indicating prior efforts to incentivize domestic manufacturing by threatening significant taxes if companies didn't establish manufacturing in the US.
Economists warn that tariffs may eventually increase consumer costs, potentially affecting consumer sentiment. This fear spurred increased consumer spending in anticipation of price hikes on items such as cars and electronics. Nintendo, for instance, postponed the US pre-order date for its Switch 2 console due to concerns over tariffs, potentially leading to a significant price increase.