U.S. President Donald Trump, known for his aggressive tariff policies, has unexpectedly announced the exemption of tariffs on about 20 electronic products, including smartphones.
This decision comes as U.S. tech giants like Apple have seen their stock prices plummet due to the tariffs, while consumers rush to stores to purchase iPhones before potential price increases, causing widespread inconvenience.
On Saturday, U.S. Customs announced the exclusion of items such as smartphones, laptops, flat-panel monitors, certain chips, and semiconductor equipment from tariff assessments.
This move is largely attributed to the sharp decline in big tech companies’ stock prices, as concerns grow about the challenges of relocating production facilities to the U.S., despite the administration’s hopes that companies like Apple would shift iPhone production domestically as a result of the trade war.
Initially, the government imposed substantial tariffs on foreign products to encourage domestic companies to repatriate their production facilities.
However, relocating iPhone factories to the U.S. could take at least five years, and the country faces a shortage of manufacturing labor. Taiwan’s TSMC, while having sufficient funds to build factories in the U.S., is hesitant to invest due to the scarcity of skilled workers available.
The U.S. has long relied on outsourcing to countries with lower labor costs, resulting in a domestic shortage of skilled manufacturing workers.
Moreover, domestic production would inevitably lead to higher iPhone prices due to increased labor costs.
Consequently, top tech stocks, including market leader Apple, have recently experienced significant declines. Apple has been hit particularly hard, with its stock dropping 10% over the past month and 20% year-to-date.
As a result, Apple’s market capitalization has fallen below $3 trillion, marking the disappearance of the only U.S. company to reach that milestone.
The downturn isn’t limited to Apple; the entire Magnificent Seven (M-7), comprising the seven major U.S. tech companies, has seen a collective market value loss of approximately $2.1 trillion since Hey imposed reciprocal tariffs on countries worldwide on April 2.
Consumer dissatisfaction likely played a significant role in this decision. There has been a surge in iPhone demand as consumers rush to purchase devices before potential tariff-induced price increases.
Experts predict that if Apple were to shift iPhone production to the U.S., prices could potentially triple due to higher labor costs.
Dan Ives, a prominent tech analyst at Wedbush Securities, forecasts that domestically assembled iPhones could cost around $3,500, approximately three times its current price.
In light of these factors, the Hey administration appears to have excluded essential electronic devices like smartphones from tariff assessments.
Following this news, cryptocurrencies rallied, with Ripple seeing gains of about 5%.
Anticipating this development, both Apple and Nvidia saw significant gains last weekend, with Apple’s stock rising 4.06% and Nvidia gaining 3.12%.
U.S. media outlets, including Bloomberg, report that authorities have excluded a total of 20 items from reciprocal tariffs, including smartphones, laptops, hard disk drives, computer processors, memory, and semiconductor equipment.