President Trump has announced that he will be revealing the tariff rate on imported semiconductors within the next week, with some flexibility for certain companies in the sector. This decision is part of an effort to encourage the production of chips and semiconductors in the United States. Earlier in the day, Trump also initiated a national security trade probe into the semiconductor sector, signaling a reset in trade within this industry.
Despite hope that everyday consumer products such as smartphones and laptops would remain exempt from reciprocal tariffs with China, Commerce Secretary Howard Lutnick made it clear that critical technology products from China will face new duties in the coming months. A special focus tariff is expected to be applied to smartphones, computers, and other electronics products in addition to the tariffs on semiconductors and pharmaceuticals. These new levies are anticipated to bring production of these products back to the United States.
The back-and-forth on tariffs by Trump has led to significant market volatility, with the S&P 500 index down more than 10% since he took office in January. Beijing responded to the U.S. tariffs by increasing its own tariffs on American imports to 125%. China has also stated that it is evaluating the impact of the exclusions for technology products implemented by the U.S. But Trump’s billionaire supporter Bill Ackman is urging him to pause the reciprocal tariffs on China for three months to avoid disruptive effects and risks on U.S. businesses.
Critics, such as Democratic Senator Elizabeth Warren, have condemned Trump’s tariff policy as causing chaos and corruption. The constantly changing nature of the administration’s approach to tariffs makes it challenging for U.S. businesses to plan and invest. Market strategists like Sven Henrich have also expressed frustration with the lack of consistency in the tariff issue. Meanwhile, White House trade adviser Peter Navarro has extended an invitation to China for negotiations but criticized their involvement in the fentanyl supply chain.
The U.S. Customs and Border Protection agency has released a list of tariff codes that are excluded from import taxes, including various products such as computers, laptops, disc drives, semiconductor devices, memory chips, and flat panel displays. Trade Representative Jamieson Greer has indicated that there are plans to engage in negotiations with several countries in the next few weeks but no immediate plans for President Trump to speak with Chinese President Xi Jinping. Billionaire hedge fund founder Ray Dalio has expressed concerns about the U.S. potentially entering a recession or facing even more severe consequences if the tariff issue is not handled properly.
