Apple, Nvidia score relief from US tariffs with exemptions

President Donald Trump’s administration exempted smartphones, computers and other electronics from its so-called reciprocal tariffs, representing a major reprieve for global technology manufacturers including Apple Inc. and Nvidia Corp. even if it proves a temporary one.

The exclusions, published late Friday by U.S. Customs and Border Protection, narrow the scope of the levies by excluding the products from Trump’s 125% China tariff and his baseline 10% global tariff on nearly all other countries.

The exclusions apply to smartphones, laptop computers, hard drives and computer processors and memory chips. Those popular consumer electronics items generally aren’t made in the U.S.

The pause will be welcome news to consumers, some of whom rushed to buy new iPhones and other devices amid fears that the tariffs would send prices soaring. It’s also a big win for major technology companies that have presented massive U.S. spending pledges for Trump in recent months. Trump’s tariffs upended global markets, triggered a selloff in stocks and ignited a rapidly escalating trade war with China.

The move is the first significant softening of any kind in Trump’s conflict with China. It was backdated to April 5.

“President Trump has made it clear America cannot rely on China to manufacturing critical technologies such as semiconductors, chips, smartphones, and laptops,” White House Press Secretary Karoline Leavitt said in a statement. “That’s why the president has secured trillions of dollars in U.S. investments from the largest tech companies in the world.” She said those companies are “hustling to onshore” their manufacturing to the U.S.

The tariff reprieve may prove fleeting. The exclusions stem from the initial order, which prevented extra tariffs on certain sectors from stacking cumulatively on top of the country-wide rates. The exclusion is a sign that the products may soon be subject to a different tariff, albeit almost surely a lower one for China.

The products that won’t be subject to Trump’s new tariffs include machines used to make semiconductors. That would be important for Taiwan Semiconductor Manufacturing Co., which has announced a major new investment in the U.S., as well as other chipmakers.

“All products that are properly classified in these listed provisions will be excluded from the reciprocal tariffs,” the notice said.

The move appeared to exclude the products from the 10% global baseline tariff on other countries, including Samsung Electronics Co.’s home of South Korea.

The tariff reprieve does not appear to extend to a separate Trump levy on China — a 20% duty applied to pressure Beijing to crack down on fentanyl, including the shipment of precursor materials. Other previously existing levies, including those that predate Trump’s current term, also appear unaffected.

“The U.S. tech industry has a loud voice and despite initial strong pushback against exemptions within the White House the reality of the situation was finally recognized in the Beltway,” Wedbush Securities analyst Daniel Ives said in a research note on Saturday. “There is still clear uncertainty and volatility ahead with these China negotiations.”

The original list of tariff exemptions included some semiconductor products — including central processing units konwn as CPUs. But those measures did not carve out tech products crucial to AI development including graphics processing units, or GPUs, and the servers that they power. Servers powered by AI chips from companies such as Nvidia and their critical components are primarily manufactured and assembled in Taiwan and Mexico.

Friday’s announcement would cover both Taiwanese and Mexican production, in a significant reprieve for companies seeking to build AI infrastructure in the U.S.

Semiconductor equipment exemptions

Also crucial are new exemptions on semiconductor manufacturing equipment, made by companies such as ASML Holding NV in the Netherlands and Tokyo Electron Ltd. in Japan. Those tools are essential for building chip factories, and comprise the lion’s share of the multi-billion dollar price tag for such plants. Companies including TSMC, Samsung, and Intel Corp. are building new U.S. facilities with support from the 2022 Chips and Science Act.

One such sectoral exclusion was for semiconductors, to which Trump has regularly pledged to apply a specific tariff. He hasn’t yet done so but the latest exclusions appear to correspond with that exemption.

The move excludes most of Apple’s core products from the escalating tariffs on China, including iPhones, iPads, Apple Watches and AirTags. It does not include AirPods. Apple shares have slid since Trump announced the tariffs.

Discussions gained additional urgency in recent days after Trump increased the tariffs on China, putting companies like Apple in a more difficult position than competitors like Samsung, who are less reliant on China. Companies and tech industry lobbyists have also argued that reshoring the final assembly of smartphones and other products is impossible, one person familiar with the discussions said.

But the move also is aimed at laying the groundwork for new targeted sectoral tariffs that are likely to hit the industry.

The administration is expected to soon launch a new investigation into imports of semiconductors. That would eventually lead to the imposition of tariffs on chips within weeks. Those duties, like ones imposed recently on steel and aluminum, are likely to impose duties on products that include semiconductors as well as the chips themselves.

“Product exclusions are coming sooner than expected,” said Wendy Cutler, a former senior U.S. trade negotiator who is now at the Asia Society Policy Institute.

Cutler said the move would have repercussions for the negotiations the Trump administration is launching with other countries as part of a 90-day pause of some of its new tariffs.

“Other companies and countries as well are now going to intensify their efforts to secure their own exceptions, complicating the 90 day negotiations underway.”

Trump’s sectoral tariffs have so far been set at 25%, though it’s not clear what his rate on semiconductors and related products would be. It’s also not clear how widely he would apply that tariff.

Representatives from Nvidia and ASML declined comment. Spokesmen for Tokyo Electron didn’t immediately respond to a request for comment. The U.S. International Trade Commission, the U.S. Trade Representative and the Department of Commerce didn’t immediately respond to requests for comment.

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With assistance from Mackenzie Hawkins and Sarah Jacob.