Donald Trump exempts smartphones and computers from new taxes
Donald Trump exempts smartphones and computers from new taxes
The administration of US President Donald Trump has exempted smartphones, computers and electronics from duties, including 125% tariffs on Chinese imports.
In a statement, U.S. Customs and Border Protection said the goods were not subject to Trump’s 10% tariffs on most countries and the much higher tariffs on China.
It was the first major change in Trump’s tariffs on China, described by one trade analyst as a “game-changing event.”
While traveling to Miami on Saturday evening, Trump said he would announce more details about the exemption early next week.
“We will be very restrained,” he told reporters on his way to his plane. However, we are making a lot of money. We are making a lot of money as a country,” he said.
The move comes after concerns that electronics manufacturers in China could push up prices in the United States.
Electronic devices and repair items will be exempt from duty from April
“This is unthinkable for technology entrepreneurs,” Dan Ivis, head of global technology research at Wedbush Securities, wrote on his X line.
“Looking at the tariffs on China, deciding to exempt smartphones and chips is a game changer.
Following the decision, tech giants such as Apple, Nividi, Microsoft and others will feel relieved over the weekend, he added.
The White House announced the exemption was to give companies more time to move products to the US.
“President Trump has made it clear that the United States will not rely on China to produce critical technologies such as semiconductors, chips, smartphones and laptops,” White House secretary Caroline Levitt said in a statement.
“According to the president’s directive, these companies are rushing to localize their products immediately.”
Donald Trump, who spent Saturday and Sunday at his Florida residence, told reporters on Friday that he was happy with the high tariffs on China.
“I feel there is something good in that regard,” he said, referring to his relationship with Chinese President Xi Jinping.
Stephen Miller, deputy chief of staff at the White House, said on Page X that the electronics would still be subject to the 20% Chinese tariff on fentanyl.
Some incidents have shown that the sharpening imposed could triple the price of an iPhone in the United States if it were passed on directly to consumers.
The United States is the largest market for iPhones, with Apple accounting for more than half of its smartphone sales in the United States last year, according to Count Point.
The survey found that 80% of Apple phones sold are made in China and the remaining 20% are manufactured in India.
In recent years, like smartphone giant Samsung, Apple has been trying to stop relying solely on China.
India and Vietnam are serving as alternative production hubs.
With this sharpening in place, Apple has reportedly tried to accelerate and scale up the production of devices in India in recent days.
Trump had planned several tough tariffs on countries around the world to take effect this week.
But on Wednesday, it announced a 90-day pause would be in effect for countries affected by higher US tariffs, meaning with the exception of China, whose tariffs have been raised to 145%.
Trump said the tariff increase on China was because the country was ready to retaliate by imposing an 84% tariff on US goods.
The US-China trade war escalated. The United States imposed a 125% tariff on Chinese products exported to the US market.
China retaliated by imposing 84% tariffs on US products entering the Chinese market.
Previously, China’s tariffs on US products were only 34%.
Trump has temporarily suspended tariffs on several countries, including China.
Trump said many countries were calling him and vowing to force him to surrender.
With China, however, they have escalated the trade war.
The trade war between the world’s two largest economies has not weakened.
Beijing said it was ready to “fight to the end.
Washington has shown that it will not back down from its decision.
Not only the tariffs, but China has banned more than 20 American companies from operating or investing in its country.
She banned executives of some companies from entering the country.
On paper, the tariffs hurt China more than the United States. Chinese companies earn more than $440 billion annually by exporting their products to the US market.
This is three times more than US companies export to the Chinese market.
Increasing tariffs will hurt Chinese companies.
According to analysts, the reality is more complex than currently assumed.
China’s passing of an 84% tariff on US products would have a devastating impact on US agricultural products, which are mainly supplied to the Chinese market, says Sarah Tan, an analyst at Moody’s Research Institute.
“The recent increases in dairy products, pork and meat, fruits and vegetables, wheat, corn, beans and chicken products will hurt US farmers because they will lower demand in the Chinese market.
US consumers will suffer as US tariffs on Chinese products increase their prices, says Alex Holmes, an analyst at the Economist Intelligence Unit.
Following Trump’s decision, China’s national media CCTV is reporting that the whole world is standing with China against the US tariffs.
China has also reportedly filed a complaint against the US tariffs at the World Trade Organization (WTO).
It also ordered China to suspend trade relations with 18 US companies.
The European Union and Canada are also said to be preparing to retaliate against the United States.
Economic scholars and analysts say the current tariffs passed by major countries will hurt the economies of developing countries.
A Chinese scholar told CCTV that China has “adequate fiscal and monetary policies” to help companies affected by the tariffs.
Trump has reportedly increased tariffs on many countries around the world, but 125% of China’s have not reported CCTV.
Analysts said President Xi Jinping had made solid preparations as Trump touted hefty tariff increases on China during the campaign to help domestic companies.
Professor Graham Allison, who recently returned to the United States from a visit to China, said he had met with senior Chinese officials and told the Chinese president he was ready for the US-launched trade war.
“Every department has already prepared on how to cope if something happens. This is confirmed by the evidence I have received, he said.
