Recently, there has been a series of tariffs on Chinese imports in the USA. The latest figure is a 14×5% tariff on imports from China. Due to these tariffs, many expect consumer technology to increase heavily in price since most of the manufacturing is still done in China.
Smartphones and computers are exempt from the US tariff
However, some important goods will have an exception to the new tariffs. On Friday, the US Customs and Border Patrol published a notice. It elaborates further on the exceptions to these new rules. Multiple USA-based tech companies, including Apple, were heavily concerned about the new tax rules. Apple even flew out multiple planes of iPhones to try and avoid the new tariffs.
Smartphones, electronic devices, and components, including semiconductors, solar cells, memory cards, and computers, are exempted from the new tariffs.
Before 2020, Apple was the only company that got an exception from the rules under Trump’s government. This is the first major exemption to the new rules, and it doesn’t just include Apple- all tech companies are exempted. The President of the USA is still confident that the high tariffs on China will bring about something positive. On the other hand, China is heavily increasing the taxes on imports from the USA as well, and both countries are currently in an ongoing trade war.
Technology imports might still have the original 20% tariff, which wasn’t part of the new extra tariffs announced on 2nd April. The White House and the U.S. Department of Customs have not commented on this yet, so we don’t have the information.
According to The Associated Press, analyst Dan Ives noted: Takes off “…a huge black cloud overhang for now over the tech sector and the pressure facing U.S. Big Tech.”
The industry was in a major panic after the tariff announcements. Many analysts and financial researchers predicted a major increase in prices for all iPhone models, with some estimating that the most expensive model could cross 2000$. For some products, the prices could have gone up to 3X the price. However, none of this is happening since the country’s leadership has announced exceptions.
The USA is the world’s biggest market for iPhones, and Apple is the tech giant. As per Counterpoint Research, more than half of the annual iPhone sales happen in the USA alone. Intentionally weakening Apple and reducing the company’s profits would’ve been worse for the US in the end, so it makes sense to grant an exception for some goods.
Over the years, Apple has slowly started manufacturing iPhones in other countries. While a majority of phones are still made in China, the company has also opened production factories in Vietnam and mainly India. 80% of iPhones sold in the USA are made in China, and around 20% are made in India. Recently, the Indian manufacturing hubs have also begun manufacturing the Pro and Pro Max iPhones.
Predicting trade wars and import trouble as competition between China and the USA grows, companies like Apple and Samsung have started diversifying their manufacturing and supply chains over the years. Samsung has found a major opportunity in Vietnam, and they already manufacture flagship phones in India.
While Trump initially announced that tariffs would go into effect immediately, he later changed course and said there’s a 90-day pause. Except for China, tariffs on all other countries are currently on pause. Trump claims this will address unfair trading and employment problems and that it’s a negotiation tactic.
