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US stock markets were expected to stage a recovery on Monday after Donald Trump excluded imports of smartphones and laptops from his tariff regime late on Friday night.
Shares in Apple and chip maker Nvidia were on course to soar after tariffs on their products imported into the US were lifted for 90 days.
The temporary reprieve was widely seen as a climbdown after pressure from Republican leaders concerned that the soaring cost of smartphones would spark a voter backlash. US retailers import about 80% of all smartphones, many of them from China, which Trump has slapped with tariffs totalling 145%.
US Customs and Border Protection said items like laptops, hard drives, smartphones, flat-panel monitors and some chips would qualify for the exemption. Vital machines made outside the US that are used to make semiconductors were also excluded.
It means these products will avoid the China tariff and the 10% baseline tariffs applied on other countries caught by the new regime.
Speaking on Air Force One on Saturday evening, Trump said he would be more specific about the latest exemption rules on Monday. “We’ve been making a lot of money,” he said. “It’s been the other way around. Other countries, in particular China was making a lot of money.”
It is not clear how long the exemption will last or whether separate tariffs will be negotiated on the specific products.
China has responded with a tariff on all US exports of 125%. Beijing said at the weekend that the reprieve for smartphones was a “small step” toward easing the trade fight between the world’s two biggest economies.
However, the US commerce secretary, Howard Lutnick, said, said the reprieve was likely to be lifted in 90 days and reiterated Trump’s longstanding plan to apply a different, specific levy to the sector.
Speaking on NBC, he said: “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 reshored. We can’t be relying on China for fundamental things that we need.”
Lutnick dismissed interpretations of Trump’s reprieve that argued it reflected the president’s realisation that his China tariffs were unlikely to shift more manufacturing of smartphones, computers and other gadgets to the US in the near future.
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Apple has spent decades building up a finely tuned supply chain in the far east, including inside China. The firm has pledged to move some facilities back to the US over the next four years, which will cost it $500bn, including constructing a giant factory in Texas for artificial intelligence servers but was expecting to retain much of its international network as it expands its sales.
Last week’s move to impose tariffs on imports to the US battered the stocks of tech’s magnificent seven – Apple, Microsoft, Nvidia, Amazon, Tesla, Google parent Alphabet and Facebook parent Meta Platforms.
At one point, they lost $2.1tn, or 14% of their value, from 2 April. Shares have recovered since last Wednesday after Trump paused the tariffs outside of China, allowing tech firms to use India and other conduits to import smartphones.
