Electronics tariff exemption sparks U.S. production shift
We cannot rely on electronics produced in China, and companies such as Apple and NVIDIA are rushing to move production to the U.S., stated White House spokesperson Karoline Leavitt on Saturday, referring to the exemption of electronics produced in the PRC from higher tariffs.
As Leavitt reminded in a statement cited by Reuters, "President Trump has made it clear America cannot rely on China to manufacture critical technologies such as semiconductors, chips, smartphones, and laptops."
She added that although these very products were exempted on Friday from the 125-percent tariff imposed on China, companies like Apple and NVIDIA, which largely produce their goods in the PRC, are "hustling" to move production to the United States.
Apple announced in February that it would invest 500 billion USD (694 billion CAD) in the U.S. over the next four years, although this announcement did not indicate that the company planned to move factories for iPhones and other equipment produced in the PRC to the United States. As part of the investment, the company plans to build an "advanced manufacturing facility" in Houston, which will produce servers supporting AI, conduct training on the production process, and increase spending on research and development in the U.S.
According to a U.S. administration representative cited by Reuters, despite the exemption of electronics from the 125-percent tariffs on China and the 10-percent tariff for the rest of the world, President Trump has not yet abandoned the intention of imposing further sectoral tariffs on semiconductors. Trump announced them multiple times.
He also said that he threatened the largest chip manufacturer, Taiwanese TSMC, with a 100-percent tax if it does not open facilities in the U.S. TSMC began construction of factories in Arizona during Joe Biden's term and announced new projects in the same location upon Trump's return to power.
Exemption of electronics from tariffs
On Friday evening, the Customs and Border Protection unexpectedly announced the exemption of about 20 electronics and technology items that are produced outside the United States, including smartphones, computers, semiconductors, solar panels, and LCD screens. They represent the largest portion of goods imported to the U.S. from China in terms of value. According to some forecasts, if the tariffs were maintained, the prices of smartphones such as the iPhone could increase by over 50 percent.
The decision regarding the devices was made a few days after President Trump suspended the previously announced tariffs on most countries for 90 days and raised tariffs on goods from China to 145 percent.
Simultaneously, in recent days, Trump has signalled that he wants to reach a trade agreement with China, although he noted that Beijing must take the first step.
