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In a significant move for the technology sector, the US Customs and Border Protection agency has published a list of tariff codes that will be excluded from import taxes, retroactively effective from 12:01 AM EDT on April 5. This list includes 20 product categories, notably the broad 8471 code encompassing all computers, laptops, disc drives, and automatic data processing equipment.
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The exclusion also covers semiconductor devices, equipment, memory chips, and flat panel displays. Although the notice did not provide an explanation for the decision, it is seen as beneficial for major technology firms such as Apple and Dell, which have been affected by heightened tariffs.
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The recent actions taken by President Trump also exempt specified electronics from the prevalent 10% “baseline” tariffs on goods from most countries apart from China, effectively reducing import costs for semiconductors imported from Taiwan and iPhones manufactured in India.
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When questioned about the rationale behind these exemptions and future plans for semiconductors, Trump stated, ‘I’ll give you that answer on Monday. We’ll be very specific on Monday … we’re taking in a lot of money, as a country.’
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Analyst Dan Ives from Wedbush Securities remarked that the announcement represents ‘the most bullish news we could have heard this weekend.’ He noted that while there is still significant uncertainty surrounding negotiations with China, major tech companies such as Apple, Nvidia, and Microsoft can breathe a sigh of relief.
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TARIFF PAIN
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The reticence to maintain high tariffs illustrates a growing recognition among the Trump administration of the potential economic pain these tariffs could impose on consumers already strained by inflation. Analysts had indicated that even a reduced 54% tariff on Chinese imports could elevate the price of a top-end Apple iPhone to $2,300 from its current price of $1,599. A further escalation to 125% could halt US-China trade.
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Smartphones ranked as the leading US import from China in 2024, amounting to $41.7 billion, while laptops followed as the second highest import at $33.1 billion, according to data from the US Census Bureau.
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To navigate these tariff challenges, Apple recently arranged cargo flights to transport 600 tons of iPhones, translating to approximately 1.5 million devices, to the US from India. This strategic move follows the enhancement of production in India to counteract Trump’s tariffs, as reported by Reuters.
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Trump’s electoral campaign included promises targeting inflation reduction as a significant issue, which emerged as a hassle for his predecessor, President Joe Biden. Nonetheless, Trump’s tenure has largely focused on imposing tariffs to reshape the global trade landscape.
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Despite bipartisan concerns regarding the potential for recession linked to the increased tariffs, Trump has expressed confidence in this economic strategy. During a recent press conference, he conveyed he maintains a positive rapport with Chinese President Xi Jinping and is optimistic about achieving beneficial outcomes from ongoing trade disputes.
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The atmosphere remains turbulent on Wall Street, with China responding to Trump’s tariff increase with a matching hike, escalating tensions in an ongoing trade conflict that threatens to disrupt global supply chains. Despite a volatile stock week that ended positively, gold prices surged to record levels, signaling investor hesitance.
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