New York
NCS
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Those purchasing for a brand new smartphone or pc could be spared from tariff-induced sticker shock. At least, for now.
President Donald Trump issued a memorandum on April 11 saying sure electronics — together with computer systems, smartphones and a few parts — gained’t be topic to the reciprocal tariffs imposed on imports from China. While tariffs on just about all different merchandise from China at the moment are not less than 145%, costs of smartphones and sure different gadgets ought to keep away from fully skyrocketing, not less than for a short while.
But with feedback from the Trump administration indicating an upcoming wave of tariffs on semiconductors — a important a part of the chips that energy digital gadgets — it’s still unclear if and when tech merchandise could get costlier in the US. Plus, the present exclusions aren’t anticipated to cowl many on a regular basis tech merchandise that customers are probably to purchase extra continuously than new telephones — equivalent to some charging cables and earbuds.
That makes it difficult for buyers to know what to anticipate, but in addition for tech firms to alter their provide chains and shipments as demand doubtlessly fluctuates due to tariff-induced worth swings — all whereas conserving costs cheap.
“It’s completely impossible for any company to plan,” stated Francisco Jeronimo, vice chairman of shopper gadgets for the International Data Corporation, a agency that tracks world shipments of tech gadgets. “So the best, the only thing they can do at the moment is… ship as many products as they can while the exemption lasts to the US.”
Some studies point out that firms could be doing simply that. Apple’s India-based suppliers shipped a document variety of iPhones to the US in March, almost $2 billion price, in accordance to Reuters. PC shipments grew by 12.6% in the US throughout the first quarter of 2025 as distributors elevated shipments forward of potential tariffs, market analysis agency Gartner stated in a press launch Monday.
The exception is a serious win for Apple, which depends on iPhone gross sales for many of its income — about $69 billion of its roughly $124 billion in its first fiscal quarter of 2025 — and has a lot of its smartphone provide chain situated in China. But the Trump administration has indicated that extra tech tariffs are coming.
Trump wrote in a Truth Social post on Sunday that “NOBODY is getting ‘off the hook,’” when it comes to tariffs, including that “there was no tariff exception” introduced and these merchandise are still topic to a 20% tariff on Chinese imports.
The excepted merchandise will be moved to a “different tariff bucket” as the administration examines the “whole electronics supply chain,” the put up stated. The Trump administration on Monday started investigating semiconductor imports to set the stage for tariffs.
Kevin Hassett, nationwide financial council director, stated when talking with NCS’s Jake Tapper on Sunday that “it was always the case” that semiconductors would be coated beneath a separate motion fairly than reciprocal tariffs.
The exception got here after Trump’s tariff insurance policies resulted in a whirlwind couple of weeks for the stock market, with the S&P 500 having its worst week since 2020 earlier this month.
But the stock market saw massive gains final week when Trump introduced a 90-day pause on most reciprocal tariffs, an indication that buyers have been looking for a reprieve from his levies.
The tech merchandise which might be — and aren’t — excepted
The exclusions particularly point out smartphones, computer systems (described as “automatic data processing machines”), screens, storage gadgets and varied parts that energy these gadgets, together with built-in circuits and transistors.
But a number of different tech merchandise don’t seem to be included in the exceptions, equivalent to USB charging cables, moveable battery packs, headphones and online game consoles, a public affairs officer for the US International Trade Commission stated in response to a NCS inquiry about whether or not these merchandise fall beneath the exceptions.
But it’ll probably depend upon which parts are inside these gadgets and the way they’re categorized.
The US ITC additionally stated pc mice and keyboards are coated beneath the exceptions, however added that US Customs and Border Protection has the remaining say on how imported items are labeled and whether or not they’re exempted from tariffs.
“It’s a gray area,” stated Dave Marcotte, a senior vice chairman and analyst with market analysis and consultancy agency Kantar. “This is where you get creative about describing your products when you move to Customs. If you look at the scheduling and say, ‘Okay, well, I have, I have peripherals. Are peripherals covered? Or (are) computer cables covered?’ Well, they’re the same thing.”
Even earlier than Trump specified these exclusions, some analysts had anticipated smaller objects like charging cables and headphones to be amongst these most closely impacted by tariffs.
“I think the first things you’re going to see (are) the stuff we don’t really pay attention to, like… USB chargers and batteries and stuff that’s less than, say, $20, $25,” Marcotte stated final week forward of Trump’s exception on smartphones and different choose tech merchandise. “It’s going to be the small stuff.”
Smaller firms don’t have the provide chain flexibility of a stalwart like Apple, for instance, and the margins on cheaper objects equivalent to charging cables are a lot decrease. That means these companies don’t have as a lot flexibility to soak up further tariff prices and would probably have to go it down to customers to flip a revenue.
And many of those ancillary tech gadgets seem to be from China.
When NCS searched Amazon for earbuds beneath $50, iPhone charging cables and moveable battery packs, a lot of the prime 5 outcomes for every product both had China listed as the nation of origin, or talked about a producer based mostly in China. Some of the outcomes didn’t identify a rustic of origin, however different product pages from the similar sellers listed merchandise as coming from China.
Trump additionally removed the “de minimis exemption,” which allowed packages valued at lower than $800 to enter the US tax-free — one other change that’s anticipated to impression the costs low cost items from China.
Price hikes on these smaller, cheaper objects could really feel extra impactful to customers in some circumstances since the distinction in worth could really feel extra drastic.
“A $40 increase to an $80 increase looks a lot worse for a consumer than, say, a $1,200 to $1,500,” stated Jack Leathem, an analyst at market analysis agency Canalys.
Although some tech merchandise bought a break on sure reciprocal levies, new tariffs on semiconductors are anticipated to arrive in the “next month or two,” Commerce Secretary Howard Lutnick advised ABC News on Sunday. It’s a part of the Trump administration’s broader effort to cut back US reliance on China whereas reshoring manufacturing.
But tariffs or not, the probabilities of an American-made iPhone appear slim. White House press secretary Karoline Leavitt stated Trump believes iPhone manufacturing could transfer to the US, however greater labor prices and the logistics of shifting Apple’s huge manufacturing community to the different aspect of the world — additional away from Asia, the place many parts would probably still be sourced — current main challenges.
And it’s not simply the parts. Finding staff would be a difficulty, too.
“It’s very hard to find skilled labor in the numbers they need,” Jeronimo stated.
Apple in February introduced a $500 billion investment to develop its US operations. But that dedication is basically centered on constructing manufacturing services for Apple Intelligence servers and boosting training in manufacturing, not constructing iPhones. And whereas a number of tech leaders like chipmaking giants TSMC and Nvidia have introduced main US expansions, the tech provide chain is basically anticipated to stay in China, says Jeronimo.
Companies are extra probably to shift some manufacturing to different areas, like the Middle East, Africa and Latin America, in accordance to Jeronimo.
Trump’s tariff coverage is already appears to be impacting some tech product launches and shipments. The US smartphone market grew greater than 5% in the first quarter of 2025, in accordance to the IDC, partially pushed by a “sense of urgency to buy before potential price increases,” the IDC’s analysis director for shopper gadgets Anthony Scarsella stated in a Monday press launch.
Nintendo additionally postponed US preorders for its new Switch 2 game console in early April because it assesses the tariff state of affairs.
“You stockpile during a hurricane because it happens for five days,” stated Dipanjan Chatterjee, vice chairman and principal analyst at market analysis agency Forrester. “There is no pantry in the world that’s large enough where you can stockpile four years’ worth of trade policy uncertainty.”