The Trump administration has exempted smartphones, computers, and other electronics from its recently imposed “reciprocal” tariffs on Chinese imports, providing a significant reprieve for American technology giants like Apple.
U.S. Customs and Border Protection issued guidance late Friday listing nearly two dozen electronic products that will not face the steep 145% tariffs on Chinese goods. Among the items spared are smartphones, computers, semiconductors, and flat panel display modules. The exemptions also cover flash drives, memory cards, and solid-state drives used for data storage.
The move represents a major policy adjustment just days after the administration dramatically escalated trade tensions with Beijing. President Donald Trump had earlier this month imposed 145% tariffs on products from China, a move that threatened to take a toll on tech giants that manufacture most of their products there.
For Apple, which relies heavily on Chinese manufacturing, the exemption offers considerable relief. Roughly 90% of Apple’s iPhone production and assembly is based in China, according to Wedbush Securities’ estimates. Without the exemption, analysts had projected dramatic price increases for popular devices.
“This is the dream scenario for tech investors,” Dan Ives, global head of technology research at Wedbush Securities, told CNBC. The tariff exclusion represents “a game changer scenario when it comes to China tariffs.”
In the days since Trump’s initial tariff announcement, market reaction had been severe. The S&P 500 plunged more than 5% last week, while Apple lost over $640 billion in market value. Some analysts had estimated iPhone prices could have increased to as much as $3,500 under the full tariff regime.
The White House framed the exemptions as providing time for technology companies to relocate production to the United States. “President Trump has made it clear America cannot rely on China to manufacture critical technologies such as semiconductors, chips, smartphones, and laptops,” White House Press Secretary Karoline Leavitt said in a statement.
The exemption applies only to Trump’s reciprocal tariffs, which climbed to 145% this week. A separate 20% tariff on Chinese imports related to what the administration describes as China’s role in the fentanyl trade remains in effect.
Trump told reporters on Saturday that he would provide more details about the exemptions on Monday. “We’ll be very specific,” he said. “But we’re taking in a lot of money. As a country we’re taking in a lot of money.”
The exemptions come in contrast to earlier statements from administration officials. Commerce Secretary Howard Lutnick had suggested just days earlier that factories making products like iPhones would move to America under Trump’s trade policies.
Industry experts remain skeptical about the feasibility of quickly shifting electronics manufacturing to the United States. Apple CEO Tim Cook and his predecessor, Steve Jobs, have said for at least 14 years that the United States lacks the know-how, employment skills and component supply chain robustness needed to manufacture the more than 200 million iPhones sold each year worldwide.
Despite the reprieve for electronics, tensions between Washington and Beijing remain high. The president has indicated he plans to launch a new national security investigation into semiconductor imports that could potentially lead to additional targeted tariffs in that sector.