After Trump’s Partial Retreat on Chinese Tariffs, Beijing Urges Administration To Go Further and Reverse All ‘Wrongful Action’

China is calling President Trump’s decision to backtrack on certain tariffs impacting consumer electronics a “small step” toward normalizing trade relations between the two countries and urging the United States to go one step further by completely reversing the trade war initiated by Washington.“This is a small step by the US toward correcting its wrongful action of unilateral ‘reciprocal tariffs’”, the Ministry of Commerce said in a statement posted on social media Sunday. The ministry said Mr. Trump should “take a big stride in completely abolishing the wrongful action, and return to the correct path of resolving differences through equal dialogue based on mutual respect.”The Trump administration late Friday said it would exclude electronics like smartphones and laptops from reciprocal tariffs, a move that could help keep the prices down for popular consumer electronics that aren’t usually made in the United States.It would also benefit big tech companies like Apple and Samsung and chip makers like Nvidia, setting the stage for a likely tech stock rally on Monday. The move offers little consolation, however, for smaller American businesses with fewer political connections that depend on China for inputs for their own products. The U.S. Customs and Border Protection said items like smartphones, laptops, hard drives, flat-panel monitors and some chips would qualify for the exemption. Machines used to make semiconductors are excluded too. That means they won’t be subject to the current 145 percent tariffs levied on China or the 10 percent baseline tariffs elsewhere.On Air Force One Saturday night, Mr. Trump told reporters he would get into more specifics on exemptions on Monday. “We’ve been making a lot of money,” he said. “It’s been the other way around. Other countries, in particular China was making a lot of money.”It’s the latest tariff change by the Trump administration, which has made several U-turns in its massive plan to put tariffs in place on goods from most countries.The exemption seemed to reflect the president’s realization that his China tariffs are unlikely to shift more manufacturing of smartphones, computers and other gadgets to America any time soon, if ever, despite the administration’s predictions that the trade war would prod Apple to make iPhones in the United States for the first time.Such a scenario after Apple spent decades building up a finely calibrated supply chain in China, however, is highly unlikely. It would take several years and cost billions of dollars to build new plants in the United States, and then confront Apple with economic forces that could triple the price of an iPhone.Mr. Trump’s decision to exempt the iPhone and other popular electronics made in China mirrors the similar relief that he gave those products during the trade war of his first term in the White House. Trump began his second term seemingly determined to impose the tariffs more broad this time, triggering a meltdown in the market values of Apple and other technology powerhouses.The turmoil battered the stocks of tech’s “Magnificent Seven” — Apple, Microsoft, Nvidia, Amazon, Tesla, Google parent Alphabet and Facebook parent Meta Platforms. At one point last week, the combined Magnificent Seven’s combined market value had plunged by $2.1 trillion, or 14 percent, from April 2 when Trump unveiled sweeping tariffs on a wide range of countries.Some of the losses eased when Trump paused the tariffs outside of China, paring the lost value in the Magnificent Seven to $644 billion, or a 4 percent decline, from April 2. Now, the stage is set for another tech rally Monday when trading resumes in the U.S. stock market, with Apple likely leading the way because the iPhones made in China remain the company’s biggest money maker.The electronics exemption also should relieve consumer worries that the China tariffs would result in hefty price hikes on smartphones and other devices that have become essential tools of modern living,It’s the kind of friendly treatment that industry was envisioning when Apple’s chief executive, Tim Cook, Elon Musk, Google’s boss, Sundar Pichai, Facebook founder Mark Zuckerberg and Amazon founder Jeff Bezos assembled behind the president during his January 20 inauguration. That united display of fealty reflected Big Tech’s hopes that Trump would be more accommodating than President Joe Biden’s administration’s and help propel an already booming industry to even greater heights.Apple won praise from Mr. Trump in late February when the Cupertino, California, company committed to invest $500 billion and add 20,000 jobs in America during the next four years. The pledge was an echo of a $350 billion investment commitment in America that Apple made during Mr. Trump’s first term when the iPhone was exempted from China tariffs.The move takes off “a huge black cloud overhang for now over the tech sector and the pressure facing U.S. Big Tech,” said Wedbush analyst Dan Ives in a research note.In a statement issued Saturday, White House Press Secretary Karoline Leavitt did not address the exemptions specifically but indicated the administration still plans to push for tech companies to move manufacturing to the United States.“President Trump has made it clear America cannot rely on China to manufacture critical technologies such as semiconductors, chips, smartphones, and laptops,” Ms. Leavitt said in an emailed statement. She said the administration has secured U.S. investments from tech companies including Apple, TSMC and Nvidia and these companies are “hustling to onshore their manufacturing in the United States as soon as possible.”

After Trump’s Partial Retreat on Chinese Tariffs, Beijing Urges Administration To Go Further and Reverse All ‘Wrongful Action’

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