Tariff Uncertainty Reigns After Commerce Secretary Calls New Electronics Exemptions ‘Temporary’ and Hints at Levies on Computer Chips

President Trump’s Commerce Secretary, Howard Lutnick, now says tariff exemptions announced Friday on electronics like smartphones and laptops are only a temporary reprieve until the administration develops a new tariff approach specific to the semiconductor industry.“This is not like a permanent sort of exemption,” Mr. Lutnick said on ABC’s “This Week” on Sunday. [Mr. Trump] is just clarifying that these are not available to be negotiated away by countries. These are things that are national security — that need to be made in America.”“They’re exempt from the reciprocal tariffs but they’re included in the semiconductor tariffs, which are coming in probably a month or two,” Mr. Lutnick said.The Trump administration late Friday said it would exclude certain electronics from reciprocal tariffs, a move that could help keep the prices down for popular consumer devices that aren’t usually made in the United States. In a Sunday social media post, however, Mr. Trump disavowed those reports.“There was no Tariff ‘exception’ announced on Friday,” the president said. “These products are subject to the existing 20% Fentanyl Tariffs, and they are just moving to a different Tariff ‘bucket.’”“We are taking a look at Semiconductors and the WHOLE ELECTRONICS SUPPLY CHAIN in the upcoming National Security Tariff Investigations,” he added.Friday’s move was expected to benefit big tech companies like Apple and Samsung and chip makers like Nvidia and sent futures in many American tech stocks soaring. 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 return of tariff uncertainty on Sunday following Mr. Lutnick’s remarks pared the weekend optimism for tech stocks and left traders scratching their heads once again about the future of American trade policy.A Fox Business reporter with close ties to the administration, Charles Gasparino, described Mr. Lutnick’s Sunday remarks as “off-message” for the administration. “Now the market will open way down again since it appears the administration is totally confused,” Mr. Gasparino wrote on X. “Susie (Wiles) needs to get control of Lutnick. He is a wrecking ball.”Billionaire Ray Dalio, founder of the world’s largest hedge fund, appearing on NBC’s “Meet the Press” Sunday, said the mixed messages coming from the White House so far have had a “disruptive” effect on the American economy.“We don’t know what the numbers are. But that could be part of a process, right?” he said of the back-and-forth on the tariffs so far. “What was put there is like throwing rocks into the production system, and those impacts would be enormous in terms of the efficiency of the whole world.”The move removes “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. Ives amended that note after Lutnick’s comments Sunday, saying the confusing news out of the White House “is dizzying for the industry and investors and creating massive uncertainty and chaos for companies trying to plan their supply chain, inventory, and demand.”Sunday’s remarks are 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. Mr. Lutnick’s comments made clear that more changes were on the way, including a policy specific to the computer chip industry.On Air Force One Saturday night, President Donald 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.”The exemption filed Friday night seemed to reflect the president’s realization that his China tariffs are unlikely to shift more manufacturing of smartphones, computers and other gadgets to the United States any time soon, if ever, despite the administration’s predictions that the trade war prod Apple to make iPhones in America for the first time.But that was an unlikely scenario after Apple spent decades building up a finely calibrated supply chain in China. What’s more, 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. But Mr. Trump began his second term seemingly determined to impose the tariffs more broadly.The turmoil has battered the stocks of tech’s “Magnificent Seven” — Apple, Microsoft, Nvidia, Amazon, Tesla, Google parent Alphabet and Facebook parent Meta Platforms.At one point, the 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. When Trump paused the tariffs outside of China last week, the lost value in those companies was pared to $644 billion, or a 4 percent decline.

Tariff Uncertainty Reigns After Commerce Secretary Calls New Electronics Exemptions ‘Temporary’ and Hints at Levies on Computer Chips

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