Trump backtracks on China tariffs for tech products

In a significant reversal of his flagship trade policy, US President Donald Trump has exempted key technology products – including smartphones and flat-screen televisions – imported from China from steep tariffs.

The move, announced quietly by US Customs and Border Protection late Friday, also extends to computers and camera accessories. This decision comes amidst reports of American consumers rushing to stores in anticipation of massive price hikes that were slated to take effect next week.

The exemption means these popular electronic goods will now be spared the previously announced 125% levy on Chinese goods, as well as the existing 10% tariff applied to most other countries.

The sudden U-turn follows a period of significant market volatility triggered by Trump’s initial announcement of “reciprocal” tariffs. The subsequent stock market downturn and concerns expressed by bond markets reportedly prompted the President to put the tariffs on hold for 90 days earlier in the week.

The exemption of tech products underscores the significant reliance of American consumers and companies on goods manufactured in China. Notably, the US accounts for over half of Apple’s global iPhone sales, with the majority of these devices being assembled in China.

Similarly, a substantial portion of computers and flat-screen televisions imported into the US are also manufactured in China. Imposing hefty tariffs on these items would have likely led to significant price increases for American consumers and potentially harmed US tech companies.

While the White House defended the policy shift by stating the need to onshore critical technology manufacturing, the exemption suggests a recognition of the immediate economic impact that tariffs on these consumer electronics would have had. Experts have warned that disrupting the deeply integrated US-China trade relationship could lead to higher prices for consumers and potentially spark a global recession.

The decision has already drawn scrutiny, with some analysts questioning whether certain parties were tipped off about the exemptions beforehand, noting a surge in Apple’s stock price following the announcement. The move highlights the complexities and potential inconsistencies of the administration’s trade policy as it navigates the delicate balance between protecting domestic industries and managing consumer costs and international trade relations.