Amid uncertainty over rising costs as a consequence of steep tariffs, the White House announced an exemption for imported smartphones, laptops, chips, and other electronics. This temporary exemption would have significant implications for the US economy, which has suffered highs and lows since the announcement of new tariffs.
The Trump administration had previously imposed up to 145% tariffs for imported goods from China and a minimum 10% global tariff for nearly all other countries. While the tariff on China has yet to be enacted, US consumers were riddled with concerns of price hikes that translated into a crashing stock market and panic-buying electronics.
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The new exemption announced by the White House is temporary as a way to pause tariffs on some imported electronics, including smartphones, laptops, CPUs, memory chips, and semiconductor manufacturing equipment. Other electronics included in the exemptions are solar cells, flash drives, tablets, memory cards, and flat panel TVs.
But other consumer tech products, like computer accessories, earbuds, gaming consoles, and Li-Ion batteries are excluded from the initial exemption and would remain subject to tariffs.
As retailers adjust to the added costs of tariffs, consumers could see higher prices on imported goods.
The strategy behind the tariff is to encourage tech manufacturing in the US, and the White House has claimed in its announcements that tech companies are scurrying to onshore production. But companies are already taking a hit after the tariff announcements, like Apple, which lost over $640 billion in market value over the past week.
Companies may reduce imports on products that are subject to tariffs, leading to potential shortages and increased prices. This could influence buyers to delay purchases or seek alternative products.
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“President Trump has made it clear America cannot rely on China to manufacturing critical technologies such as semiconductors, chips, smartphones, and laptops,” Karoline Leavitt, White House press secretary, said in a statement. “That’s why the president has secured trillions of dollars in US investments from the largest tech companies in the world.”
An iPhone that is completely ‘Made in the USA’ could cost as much as $3,500, some reports say, up from its current $1,200.
Shifting manufacturing entirely to the US is not immediately possible for the main tech companies. While Apple and Nvidia are getting a temporary relief from tariffs on some imported goods, sources say it would take decades and billions of dollars just to move 10% of Apple’s supply chain to the US.
Apple still assembles 90% of its iPhones in China, but the company has diversified its supply chain to make iPhones in India, assemble Macs in Malaysia, and sourcing components from Vietnam. These countries are all facing new tariffs.
The latest exemption would also cover Tawianese and Mexican production, where companies like Nvidia manufacture and assemble components.