The Trump administration made an announcement late Friday that electronics such as smartphones, laptops, hard drives, flat-panel monitors, and certain types of chips will be exempt from reciprocal tariffs. This move aims to keep the prices of popular consumer electronics down, which are typically not produced in the U.S. Additionally, big tech companies like Apple and Samsung, along with chip manufacturers like Nvidia, stand to benefit from this decision, potentially leading to a rally in tech stocks when the market opens on Monday.
U.S. Customs and Border Protection clarified that these electronics would be exempt from the steep 145% tariffs on goods from China, as well as a baseline 10% tariff on goods from other countries. However, machines used in semiconductor manufacturing were excluded from the exemption.
This tariff exemption is part of a series of adjustments made by the Trump administration to its broader tariff strategy. It seems to reflect the realization that the administration’s trade war with China, which had initially aimed at prompting U.S. companies like Apple to relocate manufacturing to the U.S., had not resulted in significant shifts in production. After years of building a well-established supply chain in China, Apple and other tech giants would face years of investment and skyrocketing costs if they tried to move production to the U.S. As a result, moving manufacturing back to the U.S. would not only be impractical but could also raise the cost of products, such as iPhones, to the point of damaging their sales.
The decision to exempt popular electronics like smartphones and laptops mirrors similar moves made during Trump’s first term, where Apple’s products were given relief from China tariffs. At the time, the administration had suggested the tariffs would encourage domestic production of gadgets, but those expectations proved unrealistic.
Trump’s latest tariff policies caused significant volatility in the stock market, particularly affecting tech companies, known as the “Magnificent Seven” — Apple, Microsoft, Nvidia, Amazon, Tesla, Alphabet (Google), and Meta (Facebook). Earlier this week, these stocks collectively lost $2.1 trillion in value, or about 14%, since Trump announced the expanded tariffs. However, when Trump paused tariffs on products outside China, it helped mitigate some of those losses, reducing the total decline to $644 billion (around 4%).
With the new exemptions in place, a tech stock rally is expected on Monday, with Apple likely leading the charge, as iPhones remain the company’s top-selling product. This move also eases concerns that the tariffs would cause significant price hikes on smartphones and other essential electronic devices.
For Big Tech, this tariff relief aligns with expectations that Trump would be more favorable than the Biden administration toward the industry. This support was reflected when top executives from Apple, Tesla, Google, Facebook, and Amazon stood alongside Trump at his inauguration, signaling their hopes for a more accommodating stance.
Apple was also praised in February when it committed to investing $500 billion and creating 20,000 jobs in the U.S. over the next four years, building on a similar commitment made during Trump’s first term. As analysts like Dan Ives noted, this exemption removes a significant burden from the tech sector, providing some much-needed relief for U.S. tech companies.