Importance Score: 55 / 100 🔵
Trump Tariff Policy: iPhone Exemption May Be Short-Lived Amid Semiconductor Focus
A temporary reprieve from President Trump’s tariffs for iPhones and other electronics manufactured in China may be short-lived, according to Commerce Secretary Howard Lutnick. Just two days after the White House announced an exemption on certain Chinese goods, Lutnick suggested that new tariffs targeting semiconductors could soon impact these products.
Semiconductor Tariffs Looming
In a Sunday interview on ABC News’ “This Week,” Lutnick stated, “So what he’s doing is he’s saying they’re exempt from the reciprocal tariffs, but they’re included in the semiconductor tariffs, which are coming in probably a month or two. So these are coming soon.”
He elaborated that these electronics “are going to come under semiconductors, and they’re going to have a special focus type of tariff to ensure that those products get restored,” presumably referring to domestic manufacturing.
Brief Reprieve for Apple and Electronics Makers
On Friday, the Trump administration filed a rule that exempted a range of electronic devices from the president’s “reciprocal” tariffs imposed on Chinese imports to the United States.
This ruling offered a respite for Apple and other consumer electronics companies that had been facing potential tariffs as high as 145% under Trump’s recently announced trade measures.
vCard.red is a free platform for creating a mobile-friendly digital business cards. You can easily create a vCard and generate a QR code for it, allowing others to scan and save your contact details instantly.
The platform allows you to display contact information, social media links, services, and products all in one shareable link. Optional features include appointment scheduling, WhatsApp-based storefronts, media galleries, and custom design options.
Data from Evercore ISI indicates that over 80% of Apple products are assembled in China. Apple CEO Tim Cook has reportedly cultivated close ties with President Trump during the ongoing tariff discussions.
Prior to the escalation of tariffs on China, experts had speculated that top-tier iPhone models could see price increases reaching $2,300 under the tariff regime.
Tariff Pause and Shifting Policy
Last Wednesday, as Trump’s suite of “reciprocal” tariff rates were scheduled to take effect, the president abruptly changed course, announcing a 90-day suspension. This pause was initiated as his administration engages in negotiations for new trade agreements with various nations. Trump commented that market anxieties contributed to his decision, stating people were “getting a little bit yippy, a little bit afraid.”
Despite the pause on customized rates, Trump maintained a 10% baseline tariff on nearly all imports and announced a 125% tariff targeting goods and services from China. White House officials clarified that the 20% tariff on Chinese goods, previously announced due to fentanyl concerns, remains in place, bringing the total tariff rate on most Chinese imports to 145%.
China ranks as America’s third-largest trade partner globally.
Semiconductors and National Security
Electronics from China will still be subject to other tariffs, including the 20% rate implemented earlier in the year concerning the fentanyl crisis.
Lutnick emphasized the strategic importance of domestic manufacturing, stating, “We need to have semiconductors, we need to have chips, and we need to have flat panels — we need to have these things made in America. We can’t be reliant on Southeast Asia for all of the things that operate for us.”
He further explained the administration’s intention to use tariff incentives to “encourage” the pharmaceutical industry to relocate manufacturing to the US.
“We can’t be beholden and rely upon foreign countries for fundamental things that we need,” Lutnick argued. “So this is not like a permanent sort of exemption. He’s just clarifying that these are not available to be negotiated away by countries. These are things that are national security that we need to be made in America.”
Conflicting Messages on Exemptions
Prior to Wednesday’s tariff pause, senior administration officials had consistently asserted that President Trump would not grant any exemptions, emphasizing that his protectionist trade approach was not a negotiating tactic.
Peter Navarro, senior counselor for trade and manufacturing, reiterated this stance on Sunday, insisting that Trump’s “policy is no exemptions, no exclusions,” despite the temporary electronics tariff relief.
Navarro addressed the complexities of semiconductor tariffs, noting, “The problem, interestingly for chips, because this is very complex stuff, is that we don’t buy a lot of chips, like in bags. We buy them in products. So what Secretary of Commerce Howard Lutnick is doing as we speak is an investigation of the chip supply chain.”
Uncertainty over Semiconductor Tariff Rate
The specific tariff rate the Trump administration is considering for semiconductors remains unclear.
Former President Joe Biden’s administration previously sought to bolster domestic semiconductor manufacturing through the 2022 bipartisan CHIPS and Science Act, which provided subsidies to chip manufacturers. Trump has been critical of the CHIPS Act, advocating for tariffs as a more effective strategy to revitalize US semiconductor production.