President Trump stoked confusion this past weekend about tariffs on smartphones, but investors are viewing an electronics exemption announced Friday night as an important temporary win for Apple (AAPL) and other China-dependent technology giants.
The move is also feeding a growing sense that Trump has a willingness to listen and bend on tariffs — as long as the aggrieved party has the political pull to get the president’s ear.
The excitement for investors came after a late Friday evening pivot from the Trump administration, which announced exclusions for smartphones, computers, semiconductors, and other electronics from the president’s “reciprocal” tariffs.
The president then pushed back in a Sunday afternoon social media post, claiming “there was no Tariff ‘exception’ announced on Friday” (even as the White House itself described the move as a “Clarification of Exemptions,” with US Customs and Border Protection adding it was a “Reciprocal Tariff Exclusion for Specified Products”).
The president said these products are simply moving to a different tariff “bucket” but then offered a series of comments suggesting Apple and others could be in line for help.
Asked specifically about Apple products Monday in the Oval Office, Trump said, “I’m a very flexible person,” adding that “there will be maybe things coming up, I speak to Tim Cook, I helped Tim Cook recently.”
He also noted on Monday: “I’m looking at something to help some of the car companies.”
Either way, the fact remains that Trump has offered at least a temporary boost to companies with close links to China, and investors are responding by sending stocks of directly impacted companies like Apple and Dell (DELL) higher on Monday morning.
It also appears the move could lead to lower longer-term rates for technology, with Ed Mills at Raymond James noting the national security-related tariffs that could ultimately be applied to semiconductors “will likely be in the 25% range” — potentially representing a significant break for what at least Chinese importers had been facing.
“This announcement will continue to elevate business uncertainty, raise questions of fairness, and, if viewed as ‘arbitrary and capricious’ from a legal perspective, raise the legal risks,” Mills added.
The move is also a significant walk-back of Trump’s overall tariff plans, with electronics representing the top exports from China to the US.
Capital Economics calculates that this weekend’s move means the overall effective tariff rate on US imports is now 22% — down from 27% just last week.
“Trump does Tim Apple a solid,” Capital Economics summarized in a note over the weekend, adding that “the success of Apple’s Tim Cook in getting its smartphones exempted likely to boost the lobbying by firms in other sectors.”
Indeed, Cook has emerged as one of the CEOs with the closest relationship to Trump. Cook speaks to him regularly and was awarded a prominent seat near the president on Trump’s Inauguration Day last January.
Apple CEO Tim Cook is seen behind President Trump and Vice President JD Vance after the two were sworn into office on Jan. 20. (Shawn Thew/Pool/AFP via Getty Images) ·SHAWN THEW via Getty Images
These latest twists have also left some to ask whether small businesses — without the political connections — will be able to get the same treatment.
“It’s not just about Apple or the larger companies, it’s about a lot of small businesses,” Tina Wells, a former importer of products from luggage to home office supplies from China and currently a coach for retail businesses, said in an interview Sunday.
She noted that the tariffs can force these smaller outlets out of business, adding that the tariffs’ on-and-off-again nature has hit her clients hard.
“What I tell founders is that we are in the messy middle,” she added of the rollout of Trump’s trade agenda in recent weeks, comparing it to a game of whack-a-mole.
In one case, Wells noted, a smaller company was able to evade the tariffs on their products by a single day in a stroke of luck that allowed it to stay in business.
Larger companies certainly have more options than small businesses to dodge the tariffs due to their worldwide networks and political relationships.
Apple, as one example, gained attention in recent days for reportedly chartering cargo flights to quickly move as many as 1.5 million iPhones to the United States from India to get ahead of tariffs there.
Recent actions also appear to follow a pattern seen in Trump’s first term, where exceptions came in a somewhat haphazard fashion, seemingly tied to political connections.
The Brookings Institution has studied the issue and found that companies devoted considerable resources in 2017 and 2018 to try to skirt Trump’s duties, with politically favored importers often winning relief.
“Tariffs create conditions for political favoritism,” added Erica York of the Tax Foundation in a social media post over the weekend, citing a second study of Trump’s first term that highlighted an apparent link between political donations and the receipt of tariff relief.
Over the weekend, Commerce Secretary Howard Lutnick and a range of Trump aides tried to underline how firmly electronics will be in the administration’s sights in the coming days. Trump also said on Sunday that “NOBODY is getting ‘off the hook.'”
Yet carve-outs for business-world allies were something Trump often signaled on the campaign trail.
“Oh, we have exceptions,” he said during a campaign trail stop in Chicago last October, where he also told the story of Apple’s Cook visiting him during Trump’s first term to successfully lobby for his company.
