US electronics tariff exemptions lift markets amid trade war fears
But even the electronics tariff reprieve, which US officials late Friday said would mean exemptions from the latest duties against China for a range of high-end tech goods such as smartphones, semiconductors and computers, brought new uncertainty.
Trump suggested on Sunday that the exemption would be only temporary and said he still planned to put barriers up on imported semiconductors and much else.
“NOBODY is getting ‘off the hook’ for the unfair Trade Balances,” Trump blasted on his Truth Social platform. “We are taking a look at Semiconductors and THE WHOLE ELECTRONICS SUPPLY CHAIN.”
On Monday in remarks at the White House, Trump once again pivoted to suggesting possible compromise, saying he was “looking at something to help some of the car companies” hit by his 25% tariff on all auto imports.
“I don’t want to hurt anybody,” he said.
The Chinese commerce ministry said Friday’s move was only “a small step” and all tariffs should be cancelled.
Xi’s warning
Xi warned on Monday – as he kicked off a Southeast Asia tour with a visit to Vietnam – that protectionism “will lead nowhere” and a trade war would “produce no winner”.
Trump initially unveiled huge tariffs on countries around the world on April 2.
He then made an about-face a week later when he said only China would face the heaviest duties, while other countries got a global 10% tariff for a 90-day period.
The trade war is raising fears of an economic downturn as the dollar tumbles and investors dump US government bonds, normally considered a safe haven investment.
And the latest wrangling over high-tech products – an area where China is a powerhouse – illustrates the uncertainty plaguing investors.
Washington’s new exemptions will benefit US tech companies such as Nvidia and Dell as well as Apple, which makes iPhones and other premium products in China.
But the relief could be shortlived, with some of the exempted consumer electronics targeted for upcoming sector-specific tariffs on goods deemed key to US national defence networks.
On Air Force One on Sunday, Trump said tariffs on semiconductors – which power any major technology from e-vehicles and iPhones to missile systems – “will be in place in the not distant future”.
The US President said he would announce tariff rates for semiconductors “over the next week”, and Commerce Secretary Howard Lutnick said they would likely be in place “in a month or two”.
The White House says Trump remains optimistic about securing a trade deal with China, although administration officials have made it clear they expect Beijing to reach out first.
US Trade Representative Jamieson Greer told CBS’s Face the Nation on Sunday that “we don’t have any plans” for talks between Trump and Xi.
The Trump administration also says that dozens of countries have already opened trade negotiations to secure deals before the 90-day pause ends.
Japanese Economic Revitalisation Minister Ryosei Akazawa will visit Washington for negotiations this week, with his country’s automakers hit by Trump’s 25% tariff on the auto sector.
He warned that Japanese company profits are already “being cut day by day”.
“I will do my best, bearing in mind what’s best for our national interests and what is most effective,” Akazawa said in Parliament.
– Agence France-Presse
