Tech Tariff Turmoil Continues As Trump Admin Exempts Some Electronics, Then Promises To Bring Taxes Back

World War Fee The Trump administration’s strategy to use tariffs on imports as an incentive for businesses to move their manufacturing plants to the USA took a new turn over the weekend after it announced exemptions for some goods, denied the exemptions were new, then said it plans further tariffs on high-tech goods.

To understand what's happened in the last couple of days we need to start on April 2nd, when president Trump announced tariffs on all imported goods. The Executive Order 14257 that proclaimed those tariffs mentioned “semiconductors” as exempt from tariffs and linked to a 37-page Annex [PDF] that listed items that won’t be tariffed

The exemptions update

Late on April 11th, US Customs and Border Protection published “further guidance on the additional duties” imposed by the Executive Order 14257 of April 2nd. The document lists 20 “HTS codes” that are exempt from tariffs.

HTS codes are defined in Harmonized Tariff Schedule of the United States (HTSUS), a 4,400 page behemoth that lists over 10,000 types of goods subject to import duties.

The Register has compared the list of HTS codes listed as exemptions in the April 11th guidance to those listed in the Annex to Executive Order 14257. We’ve counted nine HTS Codes that weren’t mentioned on April 2nd but which are mentioned in the further guidance published on April 11th.

The codes mentioned in both documents describe semiconductors – as was explained in the Executive Order 14257.

The nine HTS codes mentioned only in the new guidance include 8471 and 8471.30.01, which describe computers and laptops, plus 8517.13 which covers smartphones.

HTS code 8542 also made the new list, a notable inclusion as its subheadings cover CPUs, GPUs, systems-on-chips, microcontrollers and memory.

So it sure looks like some new exemptions were announced last Friday.

Policy goals vs. policy outcomes

The Trump administration’s policy to lure manufacturing back to the USA runs alongside another to that calls for aggressive action against China, including 145 percent tariffs on goods from the Middle Kingdom – to address what it believes are unfair trade practices and national security issues.

Another Trump administration priority is controlling inflation and lowering prices. Tariffs on imported goods – at either the 145 percent rate imposed on China, the lower levies on other countries announced but then paused for 90 days, or the administration’s blanket ten percent blanket levy on most imports – won’t help to meet those goals.

Analyst firm IDC’s vice president for devices, Francisco Jeronimo, said the fresh exemptions represent “clear recognition of the economic shock such duties would deliver to American consumers, some of the most popular consumer electronics brands and the broader tech industry.”

“Imposing tariffs on these goods would translate directly into higher retail prices—pushing up inflation, squeezing household budgets, and potentially eroding the global competitiveness of some of America’s most valuable firms,” he added.

Exempting more goods from tariffs, by contrast, would help to keep prices low and avoid an obviously inflationary influence.

More tech tariffs coming

On Sunday, President Trump used his Truth Social account to describe reporting of extra exemptions as “Fake News” and added: “We are taking a look at Semiconductors and the WHOLE ELECTRONICS SUPPLY CHAIN in the upcoming National Security Tariff Investigations.”

Commerce Secretary Howard Lutnick, in a Sunday appearance on ABC News program This Week, acknowledged the exemptions on semiconductors and other electronics and said they are not "a permanent exemption" and will again be tariffed under “sectoral tariffs” to be announced in “a month or two”.

Lutnick said the forthcoming tariffs will be part of an effort to "reshore" manufacturing in the interests of national security and will focus on both semiconductors and medicines.

Zichen Wang, a journalist for Chinese state media who analyzes Beijing in the Pekingology blog, on Sunday pointed to a Q&A between a journalist and China’s Ministry of Commerce, in which an official addressed the exemptions announced on April 11 and described them as a “a small step for the United States to correct its wrong practice” and calls for America to take a “major step” of showing respect for China by removing all reciprocal tariffs.

Wang believes the Q&A is an indicator of an “off-ramp” Beijing is offering the US to end the trade war.

But China has reportedly also banned export of critical minerals and magnets that US industry relies on for many applications. Which doesn't sound like an off-ramp.

• China ups tariffs on US goods to 125%, calls Trump's war a 'joke'
• Infosec experts fear China could retaliate against tariffs with a Typhoon attack
• Fear of tariffs made the PC market great again in Q1 as vendors emptied factories to dodge price future hikes
• Trump thinks we can make iPhones in the US just like China. Yeah, right

Secretary Lutnick said he expects Trump and Chinese President Xi Jinping “will work this out.”

“I am confident this is going to work out with China,” he said on This Week.

IDC’s Francisco Jeronimo isn’t so sure.

“Even for companies actively pursuing diversification, China often remains the primary source for these complex, high-volume products due to the sheer scale and efficiency challenges elsewhere,” he said.

Rebuilding supply chains takes time – sometimes years – and massive investments. Businesses are seldom keen to make those investments in uncertain policy environments, and in the days since April 2nd the USA has made several changes to its tariff regimes and has now exempted some items from tariffs for an indeterminate period.

The Trump administration has not explained how an American electronics company can even begin to plan a move to stateside manufacturing amid these rapid changes has not been explained – at least in public.

Whatever happens next, remarks from Trump and Lutnick about the new “sectoral” tariffs mean understanding whatever comes next will require deep dives into HTS codes. ®