US President Donald Trump has said that tariff exemptions on electronics announced on Friday are temporary and that the goods will be subject to levies soon, leading to continuing uncertainty in the market.
His administration on Friday had issued an exemption from reciprocal tariffs, including from 125 per cent levies on China and a 10 per cent rate globally, on electronic goods such as smartphones and computers.
The exceptions also covered other electronic devices and components, including semiconductors, solar cells, flat panel TV displays, flash drives, memory cards and solid-state drives used for storing data, in response to consumer concerns about a jump in prices of iPhones and other devices. Most of the exempt electronic items are not made in the US and many are imported from China.
“Nobody is getting 'off the hook' for the unfair trade balances, and non monetary tariff barriers, that other countries have used against us, especially not China which, by far, treats us the worst,” Mr Trump wrote in a Truth Social post on Sunday.
“There was no tariff 'exception' announced on Friday. These products are subject to the existing 20 per cent 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.
Mr Trump has said his move is aimed at localising tech manufacturing in the US.
“We wanted to uncomplicate it from a lot of other companies, because we want to make our chips and semiconductors and other things in our country,” he told reporters aboard Air Force One on Sunday.
Mr Trump had previously said he was “optimistic” China and the US would negotiate a deal on tariffs. His comments followed a decision from Beijing to raise tariffs on US goods from 84 per cent to 125 per cent beginning on Saturday.
China has also halted the exports of some key rare earth minerals and magnets in response to the trade war, Reuters reported last week. The minerals are essential for semiconductor manufacturing, car makers and aerospace companies.
“The problem is that there remain millions of small and medium-size American businesses that suffer from an inability to adapt to the tariffs on China overnight,” American billionaire hedge fund manager Bill Ackerman, wrote on X.
“If President Trump were to pause the China tariffs for 90 days and reduce them temporarily to 10 per cent, he would achieve the same objective in causing US businesses to relocate their supply chains from China without the disruption and risk to these businesses in the short term, and he would have time to negotiate a deal with China.”
The tariff disruption has rattled investors and weighed heavily on stock markets with trillions of dollars in value wiped out globally.
Asian stock markets rose in early trading on Monday on news of the electronics tariffs reprieve.
Japan's Nikkei 225 Index, was up 1.56 per cent at 7.50am on Monday. South Korea's Kospi rose 0.85 per cent, shares in Hong Kong's Hang Seng rose 2.47 per cent, while Taiwan’s equity benchmark Taiex was up 1.3 per cent. The Shanghai Composite index was 0.86 per cent higher and equity gauge in Australia also rose 1.42 per cent.
“Signs of the US government relenting on some of the more aggressive tariff measures helped to turn equities around at the end of the week with the Dow Jones managing a gain of 1.6 per cent on Friday while the S&P added 1.8 per cent,” Dubai bank Emirates NBD said in a note on Monday.
US and European equity futures were also higher on Monday, with the S&P 500 futures up 0.98 per cent and Nasdaq 100 futures up 0.35 per cent. The FTSE 100 futures gained 2 per cent and Euro Stoxx 50 futures rose 2.45 per cent.
