President Donald Trump announced that he would be setting a tariff rate on imported semiconductors within the next week, with some flexibility for certain companies in the sector. This move signals a potential end to the exclusion of smartphones and computers from his reciprocal tariffs on China, as Trump aims to prioritize manufacturing of chips and semiconductors in the U.S.
Earlier in the day, a national security trade probe into the semiconductor sector was announced, along with separate new duties on critical technology products from China within the next two months. This decision follows the exclusion of tech products from steep reciprocal tariffs, sparking hope that consumer products like phones and laptops would remain affordable.
Despite the exclusion, the Commerce Secretary clarified that additional tariffs on smartphones, computers, and electronics would be implemented in a month or two. These new tariffs would align with industry-specific levies targeting semiconductors and pharmaceuticals, prompting potential production shifts to the United States.
The back-and-forth on tariffs has led to significant market volatility, with Trump’s administration facing criticism and calls for a pause on broad reciprocal tariffs. Billionaire investor Bill Ackman proposed a temporary reduction to 10% for 90 days to encourage U.S. businesses to relocate their supply chains from China.
Critics, including U.S. Senator Elizabeth Warren, have raised concerns about the chaotic tariff policy and its potential economic impacts. Trade negotiations with China are ongoing, with hopes for deals with other countries in the coming weeks. However, experts like Ray Dalio warn of the risk of recession if the tariff situation is not managed properly.
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