A review of the latest tariff guidance from U.S. Customs and Border Protection indicates that smartphones and personal computers will be exempt from President Donald Trump’s sweeping tariffs that were imposed last Wednesday, Bloomberg first reported on Saturday.
On Friday, rumors circulated that smartphones might be the beneficiary of a tariff exemption from the Trump administration as the White House seeks to settle the tech industry after a turbulent week of speculation. The week ended with the U.S. hitting goods coming in from China with 145% tariffs while China responded by implementing a 125% tariff on goods coming in from the United States.
Two critical tariff codes, 8517.13.00 and 8471 are mentioned in the CBP’s latest guidance and correspond to smartphones and PCs respectively, an indication that those products won’t be as negatively impacted by the tariffs. Among the American companies to suffer the most under the current trade war is Apple who manufactures roughly 90% of their iPhones in China.
The exclusions will also include hard drives, computer processors and memory chips, items that are primarily made overseas and creating the domestic capacity for production would take years, the outlet noted.
CFRA Research analyst Angelo Zino said the tariff relief granted to Apple was likely to happen based on the huge cost it would need to absorb to keep their products within a reasonable price point.
“The tariff impact, as it stands, would be particularly severe for Apple, potentially increasing its cost of goods sold by $50 billion,” Zino said in a client note reviewed by Investor’s Business Daily. “We expect Apple to delay passing any tariff costs to consumers until its fall product cycle, while raising our odds of an Apple-specific exemption to 50% (from 20%) if no U.S.-China deal materializes soon,” Zino said.
On Thursday it was reported that Apple had preemptively shipped 600 tons of iPhones, equivalent to roughly 1.5 million devices, to the U.S. from India to build up inventory ahead of any trade war complications.
Trump’s relationship with Apple CEO Tim Cook was one of the first tech leaders to meet with Trump following his election victory. Cook personally donated $1 million to Trump’s inaugural committee and dined with the president at Mar-a-Lago to discuss the incoming president’s agenda. Cook was unique among tech execs during Trump’s first term as he sought to maintain a close relationship with the White House to aid the company in their various international legal battles.
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