Trump gives Apple a giant break with wide-ranging tariff exemptions

AppleInsider

In a surprise announcement extremely late on Friday night, President Trump has exempted smart phones, computers, and chips from the so-called reciprocal tariffs, sparing Apple and others billions in import fees.

Apple CEO Tim Cook [left] with Donald Trump [right] at a Mac Pro factory

The exclusions published near midnight eastern time grant exemptions to products that would take years to develop in the US. Apple is greatly helped by the exemptions, with much of Apple's product line now exempt from the 145% tariff applied.

Almost the entirety of Apple's product line is now exempt from the enhanced tariffs. Computers, smartphones, monitors, flash memory, DRAM, and other storage like hard drives are exempt for the time being.

Other sectors are getting a break with cuts on video cards, flat panel televisions regardless of screen type, power supplies, and other finished goods.

And, the exemptions go beyond completed hardware. Imports of silicon chips are now exempt, and also exempt are the fabrication machinery needed to make semiconductors.

Some smaller items, like leather goods, Apple Watch bands, and iPhone cases, for example, did not get a reprieve. Nor did cabling, PC cases, aluminum, titanium, or steel.

The order applies to the initial 10% and the follow-up orders after China applied their own tariffs, but it has an odd specificity. The exclusion order is downstream of the initial order, leaving open the possibility of a new tariff on these products.

Trump and China have been in a tit-for-tat tariff battle, with each raising their respective tariffs in response to the other's actions. While Trump started the hikes, he also raised the tariff on Chinese imports again to 145% after China raised its rates on imports from the US.

On Friday, China responded by declaring it would raise its tariff on U.S. goods imports from 84% to 125%. However, China also made it clear that it didn't intend to raise tariffs more, even if the U.S. did so, but it would still enact some form of countermeasures.

White House press secretary Karoline Leavitt said on Friday that Trump is "optimistic" that the U.S. and China could strike a tariff deal. "The president has made it very clear he's open to a deal with China," Leavitt told the media.

Customers rushed out to buy iPhones before Apple could announce new pricing, but now, that may not have been necessary.

All of this may have come down to US Big Tech CEOs staying in President Trump's good graces. Apple CEO Tim Cook played the long game and got the company in Trump's head early on as a good example.

Cook donated $1 million to Trump's inauguration fund and attended the event, plus in-person dinners, to help keep Apple in the front of the President's mind.

Had the tariffs stayed in place for the iPhone 17 release season, analysts were floating the possibility of an iPhone 17 Pro costing $2000 or more. The situation remains fluid, and it remains to be seen how long the exemptions will stay in place, as they are as temporary as the initial orders were.

There does not appear to have been any negotiations with the Chinese government overnight. So far, on Saturday morning, both the White House and the Chinese government are quiet.

After-hours trading has not yet been impacted by the order.



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cheesefreeze

This ‘president’ is a disaster to the world. He has no real strategy, economists are baffled by his idiotic actions and constant flip-flopping. 

Even more so, his entire corrupt administration have clearly benefited from their own actions through insider trading. They belong in jail and their assets being taken. Unfortunately in the USA, the rich are untouchable. You can buy yourself out of the law there.

daalseth

The order applies to the initial 10% and the follow-up orders after China applied their own tariffs, but it has an odd specificity. The exclusion order is downstream of the initial order, leaving open the possibility of a new tariff on these products.

I’ll be honest, I have no idea what this means. 

stabitha_christie

So the Trump "logic" was that if we applied tariffs to imports then companies would be pushed to move production to the U.S, provide enough revenue to lower the national debt, allow for tax cuts and something about fentanyl. Howard Lutnick specifically said iPhone production would move to the U.S. Now Apple has all of its products exempt. How exactly does that push Apple other move manufacturing back to the U.S? And when the most expensive products imported form China are exempt how does that work for getting enough revenue to lower the debt and pay for tax cuts? What is the actual plan because it sure as hell seems like they are just making this up as they go along.

daalseth

CheeseFreeze said:

This ‘president’ is a disaster to the world. He has no real strategy, economists are baffled by his idiotic actions and constant flip-flopping. 

Even more so, his entire corrupt administration have clearly benefited from their own actions through insider trading. They belong in jail and their assets being taken. Unfortunately in the USA, the rich are untouchable. You can buy yourself out of the law there.

Absolutely true. Corruption run amok. 
I find it interesting that around 30 years ago Star Trek invented the Ferengi, a completely corrupt, mercantile society whose morality was driven only by profit. They were created as a parody and a warning. Now we have someone with Ferengi sensibilities leading the US. What’s next, creating the Torment Nexus for fun and profit? 

mike wuerthele

DAalseth said:

The order applies to the initial 10% and the follow-up orders after China applied their own tariffs, but it has an odd specificity. The exclusion order is downstream of the initial order, leaving open the possibility of a new tariff on these products.

I’ll be honest, I have no idea what this means. 

In short, it isn't a permanent repeal, where it could have been. It's a modification to the original order.

avon b7

I'd like to say "cunning plan Baldrick!" but that would be offensive to poor Baldrick.

So Trump is doing the walk. Walking things back! 

He's making history for all the wrong reasons. 

mikethemartian

It is important that the US manufacture its own products except for high tech like smartphones and computers. But we need to bring the broom industry back to America. :-)

daalseth

Mike Wuerthele said:

DAalseth said:

The order applies to the initial 10% and the follow-up orders after China applied their own tariffs, but it has an odd specificity. The exclusion order is downstream of the initial order, leaving open the possibility of a new tariff on these products.

I’ll be honest, I have no idea what this means. 

In short, it isn't a permanent repeal, where it could have been. It's a modification to the original order.

Ah, so like TikTok where he keeps the threat available. Typical. 

Thanks.

qwerty52

Wisdom and reality are stronger than any Executive Order and they finally won!

ilarynx

Trump tariff strategy as explained by Mike Luckovich - 

https://www.ajc.com/opinion/0411-mike-luckovich-big-boy/2ZRQGX6IERBMTFF5FSBI6A4AXA/

afarstar

Big congrats to Tim Cook for his quiet and thorough diplomacy. All the Cook naysayers should hang their heads in shame. 

qwerty52

avon b7 said:

I'd like to say "cunning plan Baldrick!" but that would be offensive to poor Baldrick.

So Trump is doing the walk. Walking things back! 

He's making history for all the wrong reasons. 

He never makes mistakes:

He is turning simply around and then in his mind he is walking ahead again  ;-)

qwerty52

And in the meantime, Apple lost $150 billion thanks to him

xed

avon b7 said:

I'd like to say "cunning plan Baldrick!" but that would be offensive to poor Baldrick.. 

I'm a big Blackadder fan. Have you see Upstart Crow?

foregoneconclusion

This is additional proof that Trump's claim of an "economic emergency" that gives him the power to levy tariffs through the IEEPA has no basis in reality. Add to that the fact that the IEEPA was intended by Congress to give the executive branch the power to do sanctions on foreign governments (freeze assets/seize property) and not to control domestic economics through tariffs and the whole things is a complete farce. 

foregoneconclusion

Afarstar said:

Big congrats to Tim Cook for his quiet and thorough diplomacy. All the Cook naysayers should hang their heads in shame. 

Cook wasn't practicing diplomacy. He was paying a bribe. 

ravnorodom

Trump just recalled Tim donated him $1 million. 😮‍💨 

radarthekat

As Jobs famously told Obama, “those jobs aren’t coming back.”

Steve is no long with us, so I’ll try to educate Donald…

The way globalism and free markets work is that inputs like raw materials and labor are sourced where they are most efficiently procured. This spreads production out across the globe, providing incomes for developing nations and regions supported by demand from wealthier more developed nations.  This creates and grows a global middle class that can then afford the products made for the wealthier nations.  You can see this clearly in the global smartphone market, where those with feature phones moved up to inexpensive smartphones who then eventually joined the middle class and moved up to more premium smartphones.  Apple has benefitted from this trend as well as helped it along by doubling and then doubling again the pay of workers in SE Asian manufacturing jobs.

Globalism lifts the entire world up and betters the lives of billions.  As a retired serial software startup entrepreneur from the Boston area I’ve  lived in The Philippines since 2016 and have watched it happen here.

Meanwhile, in more advanced economies those offshored jobs are replaced with better, higher-paying jobs in STEM, engaged in R&D, engineering, product management, creative design, and entrepreneurial pursuits that create whole new industries.  We shouldn’t want those offshored jobs back; we should want our children to pursue careers in the above fields or other more rewarding endeavors.  Bringing back manufacturing jobs is not a very productive use of human capital in an advanced society that could instead educate its populous to pursue more expressive careers and lives.

nealc5

Stabitha_Christie said:

So the Trump "logic" was that if we applied tariffs to imports then companies would be pushed to move production to the U.S, provide enough revenue to lower the national debt, allow for tax cuts and something about fentanyl. Howard Lutnick specifically said iPhone production would move to the U.S. Now Apple has all of its products exempt. How exactly does that push Apple other move manufacturing back to the U.S? And when the most expensive products imported form China are exempt how does that work for getting enough revenue to lower the debt and pay for tax cuts? What is the actual plan because it sure as hell seems like they are just making this up as they go along.

Maybe someone explained to Trump that not a single desktop or laptop computer, or mobile phone, is made in the US. ALL American companies would suffer if these items were to double in price. Also, it would take 4 years or more to even start to build these things in the US, and it really is impossible.  Remember, 75% of smartphones are sold outside of the US. So electronics manufacturers will still make stuff in China. Then the same item will cost less in Canada, Europe and other places than the US. But for 60yrs or more, the US has been the place where the LOWEST prices are found. That will end. You won’t have tourists coming to the US to buy goods. They will stay home. We will lose out at every turn.

cpsro

qwerty52 said:

And in the meantime, Apple lost $150 billion thanks to him

Hopefully Apple bought back a ton of shares.