Trump threatens new tariffs on smartphones, days after exemption

UNITED States President, Donald Trump, has threatened that Chinese-made smartphones and other electronics devices were not exempted from tariffs as announced by Commerce Secretary, Howard Lutnick.

This is even as stock markets opened higher yesterday as investors latched on to the initial rollback to raise their stakes.

Contrary to the initial announcement, Trump said these goods were simply being moved into a different tariff group or bucket.

Despite Trump’s position, the exemption – temporary or not – sent shares higher in Europe and US, with the UK’s FTSE 100 rising by 2.2 per cent, while leading indexes in France and Germany both climbed.

Apple’s share price rose by 2.9 percent, since as much as 80 percent of its iPhones intended for sale in the US are made in China.

Most imports from China to the US had faced a levy of 145 percent under Trump’s new trade regime. Beijing responded with its own 125 percent tariffs on American products coming into China.

The technology-heavy Nasdaq index rose by two percent in the first few minutes of trading. The S&P 500 added 1.2 percent, while the Dow Jones Industrial Average gained 0.9 percent. Chip maker, Nvidia, was also up by 1.2 percent.

Despite the partial recovery on Monday’s opening, global stock markets are still lower than before Trump’s “Liberation Day” tariff announcement on April 2.

Many US and European indexes suffered historic drops followed by record rises after Trump suspended many tariffs for 90 days.

However, the gains have not reversed the losses. The S&P 500 index is 3.8 percent down over the last month while the FTSE 100 is 5.7 percent down, the German Dax is 8.8 percent down, and the French Cac 40 is 9.3 percent down.

A US customs notice, issued on Saturday, revealed that smartphones, computers and some other electronic devices would be excluded from the 145 percent tariff on goods entering the country from China.

But Trump chimed in on social media, saying there was no exemption for these products and called such reports about this notice false. Instead, he said that they are just moving to a different Tariff ‘bucket’.

Trump added: “We are taking a look at semiconductors and the whole electronic supply chain “in the upcoming National Security Tariff Investigations.”

He said he would provide an update on Monday about semiconductor duties.

Everyday devices such as smartphones and laptops rely on semiconductors, which are small and powerful pieces of tech that form the basic building blocks of modern computation.

On Monday, Sony announced that it was increasing the price of its flagship games console, the PlayStation 5, by about 10 percent in Europe, Australia and New Zealand, citing a “challenging economic environment”, inflation and fluctuating exchange rates. It did not announce price rises in the United States.

The Chinese commerce ministry had called Trump’s exemptions a “small step” by the US, and said that Beijing was evaluating the impact of the move.

But the suggestion by Trump administration officials of plans for future levies may dampen hopes of a thaw in the two rivals’ protectionist posture.

The White House argued that it is using tariffs as a negotiating tactic to extract more favourable trade terms from other countries. Trump has said his policy will redress unfairness in the global trading system, as well as bring jobs and factories back to the US.

However, his interventions have seen massive fluctuations in the stock market and raised fears of a decrease in global trade that could have a knock-on effect on jobs and individual economies.