President Donald Trump said on Sunday that he would reveal the tariff rate on imported semiconductors in the coming week, suggesting that excluding smartphones and computers from reciprocal tariffs in China might be temporary.
What Happened: Trump, speaking aboard Air Force One, emphasized the desire to manufacture semiconductors domestically, according to a report by Reuters.
He mentioned the need for flexibility in tariff application, without confirming if certain products like smartphones would remain exempt.
Earlier, Trump initiated a national security trade investigation into the semiconductor industry. His commerce secretary, Howard Lutnick, indicated that critical technology products from China would face new duties within two months.
The proposed tariffs have already impacted markets, with the S&P 500 index experiencing significant volatility. Bill Ackman, a billionaire investor, urged Trump to pause tariffs on China temporarily to avoid economic disruption.
Critics, including Sen. Elizabeth Warren (D-Mass.), have voiced concerns over the tariff strategy, citing potential economic harm. Meanwhile, Ray Dalio expressed fears of a recession if the situation isn’t managed properly.
Why It Matters: This announcement follows a recent decision by the Trump administration to grant a tariff reprieve to the tech industry, including companies like Apple Inc. AAPL and Nvidia Corp. NVDA.
The reprieve temporarily reduced the scope of levies on certain consumer electronics produced in China.
Trump’s aggressive tariff strategy has been a point of contention, particularly after he threatened Taiwan Semiconductor Manufacturing Co. Ltd. TSM with tariffs up to 100% if they did not manufacture in the U.S. This threat caused TSM shares to fall significantly.
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