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Stock markets rallied as President Donald Trump has exempted the reciprocal tariffs on smartphones, computers, and other electronic devices and components, including semiconductors, according to a guidance issued last Friday.
Earlier this month, Trump slapped a 145% tariff on Chinese goods — a move that put pressure on tech giants like Apple, which relies heavily on Chinese manufacturing for iPhones and other devices.
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Trump's latest move lowered that level to 20% for China-made electronic components, but it didn't rule out the prospect of steeper levies that could squeeze tech companies' profit margins.
The White House said the decision was meant to give companies more time to bring production back to the U.S.
Related: Secretary Lutnick pours cold water on tech tariff exemptions
White House deputy press secretary Kush Desai said that Trump “has made it clear America cannot rely on China to manufacture critical technologies such as semiconductors, chips, smartphones, and laptops.”
Tech companies like Apple benefit from the exemptions as China produces 80% of iPads and more than half of Mac computers, according to data from Evercore ISI.
Apple (AAPL) stock surged nearly 7.5% higher intraday before closing up 2.2% on April 14.
Even with key electronics temporarily spared from Trump’s steep reciprocal tariffs, Apple faces other headwinds—most notably, weakening iPhone sales.
iPhone sales dip in China
Apple’s (AAPL) share of the global smartphone market fell by one point to 18% in 2024, while Chinese Android brands Oppo, Xiaomi, and Vivo together captured 30% of the market, according to Counterpoint Research's data.
That weakness showed up in its most recent earnings. On Jan. 30, Apple reported record revenue and profit for the fiscal first quarter ended Dec. 28, 2024, but iPhone sales lagged.
Related: Analysts reset Apple stock price targets amid earnings, Trump tariffs
The company reported record revenue of $124.3 billion, a 4% increase from a year earlier. Net income reached a record $36.33 billion, or $2.40 a diluted share, up from $33.92 billion, or $2.28, in the year-earlier period.
Apple's iPhone revenue declined nearly 1% to $69.14 billion. The iPhone remains the company's biggest sales driver, accounting for 55.6% of the revenue in the quarter.
Sales in the Greater China region, Apple's biggest overseas market, declined 11% in the December quarter due to increased competition from local brands and regulatory challenges affecting the availability of Apple Intelligence features.