I'm not surprised by the reversal on smart phones and laptops as well as other electronic components. In his first term when Trump put tariffs on China Trump gave Apple an exemption because Tim Cook told Trump Apple would not be able to compete with SAMSUNG if tariffs were put on and Trump did not want to hurt an American company.
I believe until recently Apple had the biggest market cap of any company in the world. If Trump put 145% tariffs on Apple it would lose most of its business and market cap wiping out over a trillion of American wealth. Apple cannot build phones in the US at competitive prices. They would cost more than importing from China even with a 145% tariff slapped on. Tim Cook recently said Apple is in China because it has a skill set (production engineers) not available anywhere else. Cook said China stopped being a low labor cost country decades ago. Trump and most Americans cling to outdated notions about China.
After Trump was sworn in Apple was one of the first companies to come forward and kiss Trump's ring with an announcement it would invest a cool
HALF TRILLION DOLLARS in the United States. A completely preposterous number that will never be realized but intended to placate Trump on tariffs. Other companies like TSMC and Hyundai made similar announcements of gargantuan investments always in multiples of a hundred billion with nice big round numbers. Trump loves how the words "Billions and Billions" roll off his tongue and these smart companies know it.
These companies know how to play the game by now. They know they can curry favor by giving Trump a big "win" by announcing fictitious gargantuan investments that have no hope of being realized. We saw the same phenomenon during Trumps first term and none of the spectacular investment announcements were ever realized (see Foxconn).
I suspect that included in the exemption on electronic components are the vital components that Tesla needs to assemble its cars in the United States. Tesla did not build such an advanced car by relying solely on an American supply chain. The vital components that
once made Tesla a leader came from China where Tesla builds cars.
These reversals by Trump confirm that the rationale for putting on tariffs in the first place was seriously flawed. There was never a good case for blowing up America's standing in the world over this hairbrained gambit developed by his trade Czar Peter Navarro, a convicted felon and charlatan.
Trump likes to boast that he graduated from the prestigious Wharton School of Business. He should ask for his money back since they didn't teach him Economics 101.
How long before Trump lifts the 25% tariffs on Canadian and Mexican cars? This is another situation that is not tenable from a business or consumer standpoint. The Governor of Michigan met with Trump last week to plead that the tariffs be lifted. Michigan is facing big job losses as Trumps tariffs taxes are not going to plan.
By identifying smart phones and electronics as a weakness for the U.S. has Trump made the US vulnerable to Chinese
Export tariffs? Will Xi Jinping respond by slapping 145%
EXPORT tariffs on Apple iPhones and laptops if Trump does not completely lift the 145% tariffs on other Chinese products. China is the one country that cannot be bullied by Trump and will
NOT be bullied by Trump. In this trade war China holds ALL the cards. The U.S. has none. Not even the Trump Card!