Washington – The American tech company, hoping to bail out from President Trump’s trade war with China, was left to tackle further uncertainty on Monday and decipher whether government policies could exempt the core businesses of the US economy from crippling tariffs.
A few years ago, the industry planning to launch and manufacture products faced four days of upset from the White House. This seemed to tear apart the support for providing companies that manufacture smartphones and watches, computers, tablets and semiconductors in the US.
Within the administration, concerns were beginning to be raised about the expected price rise for popular American products such as the iPhone, which analysts said could triple the cost if Apple was forced into a trade war to manufacture devices from home. Officials familiar with the issue said 145% of technology products waived Friday, 145% from most Trump’s tariff hikes, was intended to buy time to prepare businesses.
But it also strengthened its reliance on Chinese manufacturing, which promoted Trump’s aggressive trade policy in the first place, and he somehow urged him to swear on land some of the industry’s most complex supply chains.
The result was a temporary rallies on Monday of Wall Street’s high-tech stock, followed by a second rebound.
“Look, I’m a very flexible person,” Trump told reporters Monday when asked about the exemption. “I won’t change my mind, but I’m flexible.”
The president said he agreed to give Apple support after speaking with CEO Tim Cook. He also said that he would provide temporary relief to automakers who need time to adapt to lead stocks as auto companies spike.
“Maybe things are coming near,” Trump said. “I’m talking to Tim Cook. I recently helped Tim Cook and his whole business. I don’t want to hurt anyone. But the end result is to reach the status of greatness for our country.”
I’ll be exempt for now
Guidance from US Customs and Border Protection on Friday evening came as welcome news in Silicon Valley. Key technology products are exempt from 125% collection on Beijing in what Trump calls “mutual” tariffs. The term is generally understood to mean that the exporter will charge an equal rate for imports as they charge for export. But Trump is charging higher prices.
But the White House quickly softened expectations around the exemption the following morning, when presidential counselor Peter Navarro said “policy is not exemption, it’s not exemption,” and howard Lutonic’s Howard Lutonic said tariffs on technology products would come within “a month or two.”
“They are exempt from mutual duties, but they are included in semiconductor tariffs that will likely come in one or two months,” says Lutnick. “These are national security that needs to be made in America.”
The White House Communications Office amplified his message and emailed the news media about Lutnick’s remarks before Trump became heavy on social media.
“No one has “off-hooked” because of the unfair trade balances and the barriers of financial tariffs that other countries were using against us, not particularly China, not China that deals with us, and not because of the Chinese, which is by far the most important thing! “The president wrote. “There were no “exceptions” customs duties announced on Friday. These products are subject to the existing 20% fentanyl tariffs and are simply moving to another tariff “bucket”. ”
Signs of what comes with that “bucket” came into view as the Trump administration moved to open a national security investigation into importing computer chips. This could serve as an excuse for new customs duties on the product.
Amid a confusion over the policy, the New York Times reported on Sunday that China has halted exports of rare earth minerals, essential to the manufacture of electrical components of computer chips used in smartphones, among other products, including cars and missiles.
Courting Trump’s favor
In an overture to Trump, Apple’s Cook promised in February to spend $500 billion on US manufacturing and engineering over the next four years. Still, fear continues within Apple and other major tech companies during the tariff exemption period. And how the Trump administration will always move forward with product plans when it changes its mind, on the president’s whim.
Another California-based company, Nvidia, announced on Monday it will begin manufacturing chips and supercomputers in the United States for the first time.
“The world’s AI infrastructure engine is being built in the US for the first time,” said Jensen Huang, founder and CEO of Nvidia, in a news release. “The addition of American manufacturing will meet the incredible demand for AI chips and supercomputers, strengthen our supply chain and increase our resilience.”
Aaron Klein, a senior economic research fellow at the Brookings Institute, said it would be a challenge for technology companies, or any business, to consistently respond to policies he called “non-sensical.”
“Rational economics is inappropriate to deal with how Trump behaves,” Klein said. “The tariffs appear to be designed to maximize Trump’s personal leverage for large businesses on the planet and make him the epicenter of all global news.
“All of these tech companies are shocked,” he added.
