US commerce secretary Howard Lutnick has warned that smartphones and other consumer electronics imported to America from China will still face tariffs, dealing a blow to hopes of a reprieve for Big Tech companies such as Apple, Nvidia and Microsoft.
Donald Trump’s administration this weekend excluded phones, chipmaking equipment and certain computers from steep “reciprocal” tariffs in what was a significant boost for tech groups whose stocks plunged after the president unleashed a global trade war on “liberation day”.
But speaking on ABC’s This Week on Sunday, Lutnick said such products would be re-examined as part of a government probe into semiconductors, which face a separate round of tariffs.
“What he’s doing is he’s saying they’re exempt from the reciprocal tariffs,” Lutnick said, referring to Trump. “But they’re included in the semiconductor tariffs, which are coming in probably a month or two.”
When asked to clarify whether tariffs on iPhones might “come back on in a month or so”, Lutnick replied: “Correct. That’s right . . . We need our medicines and we need semiconductors and our electronics to be built in America.”
Lutnick’s comments will spark further uncertainty on Wall Street on Monday about the impact of Trump’s tariff rollout, which has been marked by a series of reversals that have caused a share price rollercoaster and a sell-off last week in the $29tn US Treasuries market.
Ray Dalio, the billionaire founder of hedge fund firm Bridgewater Associates, warned on Sunday that Trump’s tariffs were “very disruptive”.
“I think that right now we are at a decision-making point and very close to a recession,” said Dalio, speaking on NBC on Sunday. “And I’m worried about something worse than a recession if this isn’t handled well.”
Apple, Nvidia and other US tech companies exposed to the potential tariffs did not immediately respond to requests for comment. The Consumer Technology Association, which represents many of the biggest electronics brands, declined to comment.
Any softening of tariffs on Chinese imports would be a big win for the likes of Microsoft and Apple, which makes about 80 per cent of its iPhones in China, according to analyst estimates.
Beijing on Sunday urged the White House to cancel the full extent of the “reciprocal” tariffs, arguing that “there are no winners in a trade war, and there is no way out for protectionism”.
China’s Ministry of Commerce said it was a “small step for the US to correct its wrongful unilateral reciprocal tariffs”, but that it was “evaluating the relevant impact”.
Trump’s administration has asserted that Apple can build iPhones in the US as part of its push to revive American manufacturing, a move experts say would be unrealistic given the company’s deep supply chain ties to China and South east Asia.
In the immediate term, Apple has instead pivoted to its second iPhone manufacturing base, India, where it seems likely to face lower tariffs than in China.
Over the course of the past week, Trump ratcheted up his extra tariffs on China to 145 per cent, even as he offered a 90-day pause on his “reciprocal” levies on other countries. The president maintained a 10 per cent tariff on most US trading partners.
White House trade adviser Peter Navarro said on Sunday that the US would talk to its trading partners. “We’ve got 90 deals in 90 days possibly pending here, and it was par for the course,” he said.
Since entering the White House in January, Trump has threatened multiple US trading partners with devastating tariffs that he has ultimately lowered, suspended or eliminated entirely.
“The mass confusion created by this constant news flow out of the White House is dizzying for the industry and investors and creating massive uncertainty and chaos for companies trying to plan their supply chain, inventory, and demand,” said Daniel Ives, global head of technology research at Wedbush Securities.
Trump has unleashed steep sectoral tariffs on cars and car parts imported into the US, and on all American steel and aluminium imports. US officials have indicated that further tariffs would be applied to chips, pharmaceuticals, copper and lumber.
The US has also levied tariffs of 25 per cent on goods imported from Canada and Mexico that do not comply with the terms of Trump’s 2020 USMCA free trade deal.
The exemptions offered on consumer technology goods on Friday apply only to reciprocal tariffs. All imports from China, including goods exempt from reciprocal levies, are still subject to an extra 20 per cent tariff under Trump.
Hedge fund manager Bill Ackman, who a week ago warned of a “nuclear winter” if reciprocal tariffs were not paused for 90 days, this weekend urged the president to extend the relief to all products from China.
“By leaving a 145% tariff on China for the last few days, he has sent a message to China about the consequences to China of retaliating rather than coming to the negotiating table,” he wrote on X.
“If China does not co-operate and negotiate a deal that makes sense for our country, President Trump can bring the hammer down in 90 days.”