The announcement occurred after weeks of economic tension following the Trump declaration on April 2 of a 34% rate on Chinese products, which has since been increased to 145%. With these exemptions, consumers can avoid the sharp increase in the prices of devices that many economists have advanced.
Why is this exemption a great victory for Apple and Nvidia?
Apple and Nvidia manufacture a large part of their products in China, then refer them to the United States with prices reaching up to 145%, the cost of business increased sharply. For Apple, this meant potential price increases on iPhones, iPads and MacBook – something that consumers would surely have felt in their wallets.
According to customs and border protection, exemptions will apply to smartphones, laptops, computers and specific semiconductor chips. This includes the critical components used by Apple and Nvidia. Economists had warned that if prices remained in place for electronics, costs would probably be reflected in American consumers.
Apple’s shares made a strong dive of 23% shortly after the announcement of Trump’s April 2 rate. But with growing hope of exemptions, actions have started to bounce back. NVIDIA, which has also dropped initially, has now completely recovered – another sign that investors see this exemption as a green light.
Could Apple ‘action rally again after breaking the price?
There is a good chance. After the new tariffs broke out earlier this month, Apple’s stock landed. But with the new exemption, she begins to go back. Investors are already showing renewed signs of confidence. Apple has a lot of driving on China. The company’s supply chain depends strongly on Chinese factories. Without this exemption, prices on new iPhones and MacBooks could have increased considerably, affecting sales and profitability. Until now, Apple Tim Cook’s COO has remained silent on the trade war. Although he attended the inauguration of Trump in January 2017 and reported his desire to work with the administration, he did not comment on how these last rates have an impact directly on Apple. However, Wall Street considers this price exemption as an essential break for the company.
How do these exemptions have an impact on the broader trade battle of the United States?
The tariff war between the United States and China is part of a wider Trump plan to reduce the American trade deficit. In 2023, the United States imported $ 436 billion in China while exporting only $ 154 billion. China remains the second largest exporter to the United States, just behind Mexico.
To cope with the imbalance, Trump has pushed several tariff cycles. In addition to the 145% tariffs on certain Chinese imports, there is also a 10% right on almost all global imports and a 25% overall tax on steel and aluminum.
The White House argues that these steps are necessary to bring back American manufacturing jobs. But criticisms – and even some economists – are more harmful to consumers they help American industry.
If electronics had not been exempt, prices on smartphones, computers and game devices may have increased significantly. This is why this exemption is considered a strategic victory – not only for Apple and Nvidia, but for American consumers too.
What is the next step for the technological market?
As the trade war continues, the market will probably continue to monitor the industries that Trump then targets – or choose to lose. For the moment, Apple and Nvidia can push a sigh of relief, and technological investors could start feeling a little more confident.
But it is always a game with high issues. The 145% rate remains in place for a wide range of Chinese products, and it is not clear if more exemptions will follow.
Until then, this last decision could help to stabilize the markets and provide a temporary shield to American technological companies which are based strongly on Chinese production lines.
FAQ:
Why did Apple and Nvidia benefited from Trump’s price exemption?
Because smartphones, computers and key fleas have been excluded from Chinese prices.
What products have been exempt from the 145% price of China?
Smartphones, laptops and electronic fleas have been excluded.