US President Donald Trump’s administration has exempted smartphones, computers, and certain other electronic devices from ‘reciprocal’ tariffs, providing a big relief to America’s largest company, Apple, even if the move seems temporary.
US Customs and Border Patrol published a notice on late Saturday (India time) explaining that the devices would be excluded from the 10 per cent global tariff that Trump recently imposed on most countries, along with the much larger import tax on China.
The exclusions – backdated to April 5- apply to smartphones, computers, hard drives and computer processors and memory chips as well as flat-screen displays. Those consumer electronics items are made in Asia and are imported to the US.
While excluded from the 125 per cent reciprocal tariffs on China, the high-tech products appear to still be subject to 20 per cent tariffs Trump previously imposed on Beijing in retaliation to the manufacturing in China.
President Trump has made it clear America cannot rely on China to manufacture critical technologies such as semiconductors, chips, smartphones, and laptops,” White House Press Secretary Karoline Leavitt said in a statement.
“At the direction of the president, these companies are hustling to onshore their manufacturing in the United States as soon as possible.”
The pause on tariffs brings good news for American consumers, who had feared that the new tariffs would increase the prices of consumer electronics and everyday products. Apple, in particular, had been in crisis before the Trump administration softened the impact of the duties.
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But the massive tariffs on China posed a significant threat to Apple, which manufactures most of its products in China, including the iPhone. Analysts had warned that iPhone prices could increase after the US imposed its highest tariff on imports from China. Investment bank UBS estimated that the price of an iPhone 16 Pro Max with 256GB of storage could increase by more than two-thirds—from $1,199 to nearly $2,000—if Apple passed on the the added tariff costs to consumers.
Over the years, Apple has diversified its supply chain to be less reliant on China, but even now, 90 per cent of iPhones are still manufactured there. Many see India as an alternative manufacturing hub, and Cupertino has recently increased iPhone production in the country. Apple reportedly flew 600 tonnes of iPhones from Indian factories since March before Trump’s new tariffs took effect. According to India’s Minister for Electronics and Information Technology, Ashwini Vaishnaw, Apple exported iPhones worth more than ₹1.5 trillion ($17.4 billion) from India in the financial year ending March 2025.
The Trump administration wants Apple to manufacture iPhones in the United States. However, analysts have warned that building factories would take years and cost billions of dollars to build new plants in the US. One possible reason why Apple and other companies are not bringing manufacturing back to the US and instead continue to rely on outsourcing is the lack of skilled workers, along with a supply chain that is still largely based in China—one that took decades to build.
Trump tried to pressure Apple into shifting iPhone production to the US during his first term as president. But the administration ultimately exempted the iPhone from the tariffs he imposed on China back then — a time when Apple had announced a commitment to invest $350 billion in the US. Cook also took the president on a 2019 tour of a Texas plant where Apple had been assembling some of its Mac computers since 2013.
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Since Trump’s tariff announcement, stocks have nosedived as uncertainty and volatility on Wall Street increased. In the days following the announcement, Apple lost over $700 billion in market value.
“This is the dream scenario for tech investors,” Dan Ives, who is the global head of technology research at Wedbush Securities, told CNBC. “Smartphones, chips being excluded is a game-changer scenario when it comes to China tariffs.”
Big tech firms such as Apple, Nvidia, Microsoft and the broader tech industry can breathe a huge sigh of relief this weekend, he added.
The exemption from the Trump administration will give Apple some time to better prepare and develop a long-term strategy to avoid heavy tariffs and sudden price hikes—a situation it doesn’t want to face again. The timing is crucial for Apple, especially now, as the company is just months away from launching the new iPhone 17 model. With China becoming increasingly tricky, Apple faces the huge challenge of shifting iPhone 17 production to India or another country. However, the company could also face retaliation from China if the new iPhones are not manufactured there.
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iPhone sales account for about half of the company’s revenue. The company sells about 230 million iPhones a year.
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