The White House announced significant changes to its tariff policy, exempting smartphones, computers, and chips from duties imposed on Chinese imports. Deputy Press Secretary Kush Desai shared that this shift would make it easier for companies to pivot. It incentivizes companies to bring their manufacturing back home to the US. The exemptions are part of a broader strategy following President Trump‘s recent implementation of steep tariffs, which has created turbulence in the stock market.
The announcement, made late Friday evening, comes after Trump imposed a staggering 145% tariff on various products from China earlier this month. Recently, Customs and Border Protection (CBP) released new guidelines. They’re removing 20 product categories from the 125% tariff on Chinese imports and the baseline 10% tariff on products imported from everywhere else. This ruling represents a significant victory for technology companies. It’s true that Apple, for example, is a huge winner here because it’s able to source nearly all its products from China.
In his closing comments, Desai underscored the administration’s desire to do just that. He said, “America can’t continue to let China be the main producer of key technologies such as semiconductors, chips, smartphones and laptops.” He took pains to highlight how the President challenged companies to go faster. Now, they’re scrambling to shift as much of their manufacturing processes back to the United States as quickly as they can.
The ramifications of these tariff exemptions is deep. As analysts cautioned last week, tariffs on smartphones were set to increase the price of an iPhone to more than $3,500. That’s because of some jaw-dropping projections. Here’s why such financial burdens would have had deadly consequences for consumers and manufacturers.
The day after his tariff announcement, the stock market panicked. By Friday’s close, the S&P 500 had dropped more than 5%. As just one example, Apple lost a mind-numbing $640 billion in market value through this pandemic-landed shift. Stocks from a number of sectors—including hospital stocks, agribusiness and renewable energy—saw a sell-off as uncertainty and volatility took hold on Wall Street.
Dan Ives, global head of technology research at Wedbush Securities, referred to the exemption as a transformative moment for tech investors. As he put it, “This is the dream scenario for technology investors.” He continued to argue that the exclusion of smartphones and chips is a “game-changer scenario when it comes to China tariffs.” Ives mentioned that big tech executives effectively communicated the potential fallout of the tariffs, leading the White House to reconsider its approach. Last week, big tech CEOs had their chance to testify. The White House is now forced to listen, understanding that if this went through, it would have spelled catastrophe for the whole industry.
Even with these exemptions, it is still a 20% tariff on all Chinese goods – that’s huge. The administration’s recent actions appear to bend in knee-jerk response to pressures from both Wall Street and the bond market. The bond market’s powerful upward move shouldn’t be underestimated as a driver behind some of these tariff reversals. Highlights of the deal, for example, 90-day delay for all countries, with majority wishing to move towards a global 10% rate – except China.
The things not included in Trump’s tariffs are retroactive for goods that have shipped out of factories as of April 5th, 2025. This retroactivity is yet another obstacle for companies trying to find their way through these new regulatory mazes.