Donald Trump signalled that smartphones and other consumer electronics imported to the US from China would face tariffs, dealing a blow to hopes of a reprieve for Big Tech companies such as Apple, Nvidia and Microsoft.
“NOBODY is getting “off the hook” for the unfair Trade Balances, and Non Monetary Tariff Barriers, that other Countries have used against us, especially not China which, by far, treats us the worst!” the US president wrote on his Truth Social platform.
His administration on Friday excluded phones, chipmaking equipment and certain computers from steep “reciprocal” tariffs in what was seen as a significant boost for technology groups, whose stocks plunged after Trump unleashed a global trade war this month on what he called “liberation day”.
But on Sunday, US officials played down the exemptions, warning that such products would be re-examined as part of a government probe into semiconductors, which face a separate round of tariffs.
“What he’s doing is he’s saying they’re exempt from the reciprocal tariffs,” said US commerce secretary Howard Lutnick, referring to Trump. “But they’re included in the semiconductor tariffs, which are coming in probably a month or two.”
When asked to clarify whether tariffs on Apple iPhones might “come back on in a month or so”, Lutnick replied: “Correct. That’s right . . . We need our medicines and we need semiconductors and our electronics to be built in America.”
Later on Sunday, Trump wrote on social media that the US would be “taking a look at Semiconductors and the WHOLE ELECTRONICS SUPPLY CHAIN in the upcoming National Security Tariff Investigations”.
Lutnick and Trump’s comments will spark further uncertainty on Wall Street on Monday about the impact of the president’s tariff rollout, which has been marked by a series of reversals that have caused a share price rollercoaster and a sell-off last week in the $29tn US Treasuries market.
Ray Dalio, the billionaire founder of hedge fund Bridgewater Associates, warned Trump’s tariffs were “very disruptive”.
“I think that right now we are at a decision-making point and very close to a recession,” said Dalio, speaking on NBC. “And I’m worried about something worse than a recession if this isn’t handled well.”
Apple, Nvidia and other US tech companies exposed to the potential tariffs did not immediately respond to requests for comment.
Any softening of tariffs on Chinese imports would be a big win for the likes of Microsoft and Apple, which makes about 80 per cent of its iPhones in China, according to analyst estimates.
Beijing on Sunday urged the White House to cancel the full extent of the “reciprocal” tariffs, arguing that “there are no winners in a trade war, and there is no way out for protectionism”.
China’s Ministry of Commerce said it was a “small step for the US to correct its wrongful unilateral reciprocal tariffs”, but that it was “evaluating the relevant impact”.
Trump’s administration has asserted that Apple can build iPhones in the US as part of its push to revive American manufacturing, a move experts say would be unrealistic given the company’s deep supply chain ties to China and south east Asia.
In the immediate term, Apple has instead pivoted to its second iPhone manufacturing base, India, where it seems likely to face lower tariffs than in China.
Over the course of the past week, Trump ratcheted up his extra tariffs on China to 145 per cent, even as he offered a 90-day pause on his “reciprocal” levies on other countries.
The levies on Beijing include a 125 per cent “reciprocal” tariff, and a separate 20 per cent duty on all imports to retaliate against Chinese fentanyl production.
The exemptions offered on Friday apply to the “reciprocal” portion of the tariff on China as well as to the 10 per cent “reciprocal” levy imposed on most US trading partners.
Trump’s top trade negotiator Jamieson Greer said he hoped to get “meaningful deals” with trading partners before the 90-day pause expired. “I think we’re going to be there with several countries in the next few weeks,” he added.
Since entering the White House in January, Trump has threatened multiple US trading partners with devastating tariffs that he has ultimately lowered, suspended or eliminated entirely.
“The mass confusion created by this constant news flow out of the White House is dizzying for the industry and investors and creating massive uncertainty and chaos for companies trying to plan their supply chain, inventory, and demand,” said Daniel Ives, global head of technology research at Wedbush Securities.
Trump has unleashed steep sectoral tariffs on cars and automobile parts imported into the US, and on all steel and aluminium imports. US officials have indicated that further tariffs would be applied to chips, pharmaceuticals, copper and lumber.
The US has also levied tariffs of 25 per cent on goods imported from Canada and Mexico that do not comply with the terms of Trump’s 2020 USMCA free trade deal.
Hedge fund manager Bill Ackman, who a week ago warned of a “nuclear winter” if reciprocal tariffs were not paused for 90 days, this weekend urged Trump to extend the relief to all products from China.
“By leaving a 145% tariff on China for the last few days, he has sent a message to China about the consequences to China of retaliating rather than coming to the negotiating table,” he wrote on X.
“If China does not co-operate and negotiate a deal that makes sense for our country, President Trump can bring the hammer down in 90 days.”