Trump administration says it will exclude some electronics from tariffs

NASHVILLE — The Trump administration late Friday said it would exclude electronics such as smartphones and laptops from its recent tariffs, a move that could help keep prices down for popular consumer electronics that aren’t usually made in the U.S.

It would also benefit big tech companies such as Apple and Samsung and chip makers like Nvidia and sets the stage for a likely tech stock rally Monday.

U.S. Customs and Border Protection said items including smartphones, laptops, hard drives, flat-panel monitors and some chips would qualify for the exemption. Machines used to make semiconductors are excluded too. That means they won’t be subject to the current 145% tariffs levied on China or the 10% baseline tariffs elsewhere.

It’s the latest tariff change by the Trump administration, which has made several U-turns in its massive plan to put tariffs in place on goods from most countries.

The exemption seemed to reflect President Trump’s realization that his China tariffs are unlikely to shift more manufacturing of smartphones, computers and other gadgets to the U.S. anytime soon, if ever, despite his administration’s predictions that the trade war would prod Apple to make iPhones in the U.S. for the first time.

But that was an unlikely scenario after Apple spent decades building up a finely calibrated supply chain in China. What’s more, it would take several years and cost billions of dollars to build new plants in the U.S., and then confront Apple with economic forces that could triple the price of an iPhone, threatening to torpedo sales of its marquee product.

Trump’s decision to exempt the iPhone and other popular electronics made in China mirrors the similar relief that he gave those products during the trade war of his first term in the White House. But Trump began his second term seemingly determined to impose the tariffs more broadly this time, triggering a meltdown in the market values of Apple and other technology powerhouses.

The turmoil battered the stocks of tech’s “Magnificent Seven” — Apple, Microsoft, Nvidia, Amazon, Tesla, Google parent Alphabet and Facebook parent Meta Platforms. At one point this week, the Magnificent Seven’s combined market value had plunged by $2.1 trillion, or 14%, from April 2 when Trump unveiled sweeping tariffs on a wide range of countries.

Some of the losses eased Wednesday when Trump paused the tariffs with the exception of China, paring the lost value in the Magnificent Seven to $644 billion, or a 4% decline, from April 2. Now, the market appears to be primed for another tech rally Monday when trading resumes, with Apple expected to lead the way because the iPhones made in China remain the company’s biggest moneymaker.

The electronics exemption also should relieve consumer worries that the China tariffs would result in hefty price hikes on smartphones and other devices that have become essential tools of modern living,

It’s the kind of friendly treatment that industry was envisioning when Apple Chief Executive Tim Cook, Tesla Chief Executive Elon Musk, Google Chief Executive Sundar Pichai, Facebook founder Mark Zuckerberg and Amazon founder Jeff Bezos assembled behind Trump during his Jan. 20 inauguration. That united display of fealty reflected Big Tech’s hopes that Trump would be more accommodating than President Biden’s administration and help propel an already booming industry to even greater heights.

Apple won praise from Trump in late February when the Cupertino, Calif., company committed to investing $500 billion and adding 20,000 jobs in the U.S. during the next four years. The pledge was an echo of a $350-billion investment commitment in the U.S. that Apple made during Trump’s first term when the iPhone was exempted from China tariffs.

The announcement removes “a huge black cloud overhang for now over the tech sector and the pressure facing U.S. Big Tech,” Wedbush analyst Daniel Ives said in a research note.

In a statement Saturday, White House Press Secretary Karoline Leavitt did not address the exemptions specifically but indicated the administration still plans to push for tech companies to move manufacturing to the U.S.

“President Trump has made it clear America cannot rely on China to manufacture critical technologies such as semiconductors, chips, smartphones, and laptops,” Leavitt said in an emailed statement.

She said the administration has secured investments from tech companies including Apple, TSMC and Nvidia, and these companies are “hustling to onshore their manufacturing in the United States as soon as possible.”

Neither Apple nor Samsung responded to a request for comment Saturday. Nvidia declined to comment.

Anderson and Liedtke write for the Associated Press. Anderson reported from Nashville and Liedtke from Berkeley. AP writer Darlene Superville in West Palm Beach, Fla., contributed to this report.