Trump Will Not Impose Direct Import Tariffs on Laptops and Smartphones. Good News for Manufacturers, but It’s Too Early to Celebrate.
On Friday, we analyzed the uncertainty that American import tariffs bring to the global PC market. On Friday night, there was a bit more certainty for manufacturers. The U.S. Customs has published a list of products that will be exempt from import tariffs, including smartphones and laptops.
Certain products will not fall under Donald Trump’s ‘reciprocal import tariffs’. In addition to laptops and smartphones, modems, routers, flash drives, and other electronic products are also exempt. These products escape both the ‘escalation’ of import tariffs between China and the United States and the ‘minimum rate’ of ten percent that remains in effect during the ninety-day pause.
Global Effect
According to analysis firm Canalys, American import tariffs would have a global effect on the electronics market. Many large manufacturers produce their goods in China and other Asian countries that were hit with hefty taxes. Manufacturers would likely pass these tariffs on to customers, which could lead to increased product prices.
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Trump Tariffs Push PC Market into Uncertainty
Trump’s underlying goal is to force manufacturers to bring their production to American soil through import tariffs. Manufacturers are not eager for this, as it would increase production costs, which would also lead to higher product prices. An iPhone produced in the United States would cost an estimated more than three thousand dollars.
Tariffs on Chips
Manufacturers will breathe a sigh of relief upon reading this news, but it’s still too early to celebrate. Trump is not done with his trade war, and although laptops and smartphones are exempt from direct import tariffs, they may still be subject to them indirectly.
For now, Trump is sticking to a 20 percent tax on Chinese goods and even wants to increase it to 125 percent. It’s still unclear what will happen with semiconductors and chip technology. Initially, this category was also to be spared, but Trump seems to want to drag TSMC into the trade war. That would be bad news for the chip maker’s many customers.