Customers purchase iPhone 16s and Apple Watch Series 10 watches during the first day of in-store sales at Apple’s Fifth Avenue store in New York City on September 20, 2024. Credit: Victor J. Blue/Bloomberg.
President Donald Trump pledged yesterday that he will still apply tariffs to phones, computers, and popular consumer electronics, downplaying a weekend tariff exemption for these products as a procedural step in his overall push to remake U.S. trade. The late Friday reprieve—exempting a range of popular electronics from Trump’s 125 percent tariffs on China and 10 percent flat rate around the globe—is part of a longstanding plan to apply a different, specific levy to the sector, he said. “NOBODY is getting ‘off the hook,’” Trump said in a social media post yesterday, issued shortly after he finished his golf game. The exempted products are “just moving to a different Tariff ‘bucket,’” and the administration will be “taking a look at Semiconductors and the WHOLE ELECTRONICS SUPPLY CHAIN,” he added.
U.S. Trade Representative Jamieson Greer also pledged the products would face a different tariff. “It’s not that they won’t be subject to tariffs geared at re-shoring. They’ll just be under a different regime. It’s shifting from one bucket of tariffs to a different bucket of potential tariffs,” Greer said yesterday on Face the Nation with Margaret Brennan.
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Trump told reporters aboard Air Force One that his decisions will come soon, indicating that a new tariff rate for semiconductors will be announced in the coming week. The semiconductor tariffs are “coming in probably a month or two,” said U.S. Commerce Secretary Howard Lutnick. He said a notice will be published in the federal registry this week related to semiconductors, but he didn’t elaborate. The administration will likely need to launch a so-called Section 232 investigation as a next step, which would require a report within 270 days and then open the door to tariffs.
It’s not clear what tariff rate the administration intends to apply to semiconductors and other products it covers under this tax, but tariffs on other industries have been set to 25 percent. These Section 232 tariffs may prove more permanent than Trump’s country-specific tariff rates, which are based on a more vulnerable legal authority. The president also signaled an openness to talks with companies over the scope of his sectoral tariff on semiconductors and products like iPhones and tablets that rely on them. “We’ll be discussing it, but we’ll also talk to companies,” he said. “You have to show a certain flexibility. Nobody should be so rigid.” These comments may open a window for companies and lobbyists to push for different parameters and exclusions.
Taken together, yesterday’s comments from Trump and his top trade chiefs are a stark reminder of the scope of his planned tariff onslaught. Still, the maneuver means weeks, maybe months, without extra tariffs on phones and computers, before the specific sectoral tariff on electronics kicks in—one virtually certain to be lower than the 125 percent rate on China, so these goods should still experience a level of reprieve. The exemptions, which were originally published in a U.S. Customs and Border Protection document late Friday, cover almost $390 billion in U.S. imports, based on official U.S. 2024 trade statistics, including more than $101 billion from China, according to data compiled by Gerard DiPippo, associate director of the Rand China Research Center.
Friday’s exclusion was the first time that the Trump administration published a detailed list of what products it thinks fall under the umbrella of semiconductors, which are used in electronics of all kinds. They are not required to apply the sectoral tariff to the same list, but Lutnick indicated they would.
China’s government welcomed the exemptions and urged Trump to go further. “This is a small step by the U.S. toward correcting its wrongful action of unilateral ‘reciprocal tariffs,’” the Chinese Ministry of Commerce said in a statement posted on its official WeChat account yesterday. The ministry urged the United States to “take a big stride in completely abolishing the wrongful action, and return to the correct path of resolving differences through equal dialogue based on mutual respect.”
But administration officials said this is only a pause. “All those products are going to come under semiconductors, and they’re going to have a special focus type of tariff to make sure that those products get re-shored,” Lutnick said Sunday on ABC’s This Week. “We can’t be relying on China for fundamental things that we need.”
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