Trump grants Apple extensive tariff exemptions, providing major benefits

President Trump made a surprising announcement late on Friday night, granting exemptions for smartphones, computers, chips, and other products from the so-called reciprocal tariffs, thus saving companies like Apple billions in import fees. The exemptions are a huge relief for Apple, as the majority of their product line is now exempt from the 145% tariff applied to many imports.

The exclusions come in after Trump and China engaged in a tariff war, with both sides escalating tariffs in retaliation for each other’s actions. Trump initially raised tariffs, and in response, China increased their rates, prompting Trump to raise tariffs on Chinese imports even further to 145%. In turn, China declared an increase in tariffs from 84% to 125% on U.S. goods imports but stated they were not planning further escalation, though they would implement countermeasures of some sort.

The exemptions extend beyond finished goods to areas like silicon chips and the fabrication machinery needed for making semiconductors. However, some products like leather goods, Apple Watch bands, iPhone cases, cabling, PC cases, and specific metals like aluminum, titanium, and steel did not receive a reprieve. The order applies to the initial 10% tariffs and subsequent orders, but there is ambiguity in the order’s specificity regarding future tariffs on these products.

Notably, Big Tech CEOs like Apple’s Tim Cook may have played a role in influencing Trump’s decisions. Cook’s strategic engagement with Trump and support, including a $1 million donation to Trump’s inauguration fund and attending events, seems to have positioned Apple well amidst the tariff exemptions. Had the tariffs affected the release season of iPhone 17, analysts projected significantly higher prices, with the possibility of an iPhone 17 Pro costing over $2000.

Despite speculation about potential U.S.-China tariff deals, there have been no visible negotiations with the Chinese government following the exemptions announcement. The situation remains fluid, and the longevity of the exemptions, as temporary as they are, remains uncertain. However, after-hours trading has not shown immediate impacts from the exemptions, signaling a degree of stability for the time being. Customers rushed to purchase iPhones before any price changes, but with the exemptions in place, such urgency may no longer be necessary.