A harsh 100% tariff on imported computer chips and semiconductors was announced by US President Donald Trump on 6 August. This action may result in increased costs for tech-driven goods, including appliances, autos, and electronics. As he and Apple CEO Tim Cook spoke at the Oval Office, Trump declared, "We'll be putting a tariff of approximately 100% on chips and semiconductors." "But if you're building in the United States of America, there's no charge," he continued.
Major Policy Shift from Previous Tariff Exemptions
Three months after Trump temporarily spared the majority of electronics from high tariffs, the recent tariff hike represents a significant change in policy. While some current levies remained in effect, gadgets such as computers, smartphones, and other equipment were exempt from new tariffs in April.
Recently, US Customs revised its guidelines to exempt some electronic products from the standard 10% worldwide duty and the 125% levy on Chinese exports.
U.S. Tech Giants Respond with Domestic Investment
Companies that have made significant investments in domestic production, such as Apple, Nvidia, and Intel, may profit from the exception, which is part of Trump's strategy to promote chip manufacture in the US. Almost $1.5 trillion in US investments have been promised by Big Tech since Trump took office again in January.
Impact on Apple, Nvidia, Intel, and Global Supply Chains
On August 6, Apple revealed a new $100 billion investment to increase American manufacturing. It is anticipated that the action will assist the business in avoiding possible iPhone tariffs. With this additional commitment, Apple has committed $600 billion in US investment over the next four years.
The tech giant had earlier this year declared its intention to invest $500 billion and generate 20,000 jobs nationwide. Ahead of the release of a new model next month, the exemption might help Apple sidestep tariff-related pricing pressures on iPhones made in China and India.
Following the tariff announcement, Apple shares increased 3% in after-hours trading and 5% during normal trade. Nvidia, which has increased its operations in the US and just reached a $1 trillion market value, also saw an increase. Despite recent difficulties, Intel's stock increased as well. According to the World Semiconductor Trade Statistics, sales of chips increased by almost 20% year over year as of June, indicating that demand for the product is still high worldwide.
Country-Specific Tariff Changes: India and Vietnam Targeted
Strict tariffs on nations essential to Apple's production network are another aspect of Trump's tariff strategy. India, a significant iPhone manufacturing hub, will be subject to a 50% levy, half of which will be applied to trade imbalances and the other half as payback for India's imports of Russian energy.
Vietnam, a country that produces MacBooks, iPads, and Apple Watches, is already subject to a 20% levy. Trump used Apple as an example of compliance, even though precise implementation schedules and exemption requirements are yet unknown.
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