By Amrith Ramkumar and John McCormick

A string of mixed signals from the Trump administration over the weekend regarding tariffs on smartphones, laptops and other electronics fueled fresh uncertainty over U.S. trade policy, setting up another chaotic week on Wall Street and in Washington.

Tech investors briefly rejoiced when a notice from U.S. Customs and Border Protection posted late Friday said computers, tablets, Apple watches, computer monitors, semiconductor equipment and other electronics were exempt from many tariffs on Chinese products and a 10% tariff on all U.S. imports.

When asked about the exemptions late Saturday, President Trump told reporters on Air Force One that he would talk more about them on Monday, adding that "we'll be very specific."

Administration officials on Sunday, including Commerce Secretary Howard Lutnick, said the tech products exempted from many tariffs will face separate levies in a month or two as part of a trade investigation into semiconductors. White House trade adviser Peter Navarro said Sunday the official policy is "no exemptions, no exclusions."

"There was no tariff 'exception' announced on Friday," Trump said on his Truth Social platform Sunday, adding that the products will be in the separate tariff bucket with semiconductors.

The exemptions, which weren't announced but rather included in guidance with Customs and Border Protection, initially fueled hope that the tech industry could avoid an immediate surge in costs for imported products, particularly from China, which Trump has slapped with 125% in so-called reciprocal tariffs. The prospect of new tariffs coming soon could now cause more turbulence. Shares of tech companies have swung wildly in recent trading sessions, gyrating the entire market because of their size and central role in the economy.

Microsoft, Alphabet's Google and Apple declined to comment.

Trade uncertainty has also dented consumer confidence and fueled worries about rising inflation.

"The turmoil of this tariff roller coaster is going to continue to have negative effects," said Adam Thierer, a senior fellow at the R Street Institute think tank focused on technology and innovation. He hopes the exemptions were a signal that the administration is pulling back from extreme policies. Thierer and other experts have warned that tariffs on tech products would undermine the U.S. in its artificial-intelligence race with China.

Investors will be monitoring first-quarter earnings this week from big banks including Goldman Sachs Group, Bank of America and Citigroup as well as industrial firms like United Airlines for fresh clues about how tariffs are affecting the economy. Investors including Bridgewater Associates founder Ray Dalio and corporate executives have sounded the alarm about a possible recession in recent days.

"I think that right now we are at a decision-making point and very close to a recession," Dalio said Sunday on NBC's "Meet the Press."

Neel Kashkari, president and CEO of the Federal Reserve Bank of Minneapolis, said Sunday prospects of a recession will be determined by whether there are "quick resolutions" to trade uncertainties with major trading partners. He pointed to recent declines in consumer confidence as troubling.

"This is the biggest hit to confidence that I can recall in the 10 years that I've been at the Fed, except for March of 2020 when Covid first hit, " he said. "So when there is that kind of hit to confidence it can have large effects on the economy."

Democratic Sen. Elizabeth Warren said Sunday that Trump's trade war will discourage business investment in the U.S. "Tariffs can be an important tool in the toolbox when used in targeted ways," the Massachusetts senator said on CNN's "State of the Union" program. "But right now what we've got is chaos."

The weekend signals were the latest twist in a head-spinning stretch for U.S. trade policy and could at least temporarily benefit companies such as Apple, Samsung, HP, Dell and Microsoft that manufacture some of their electronics outside the U.S. The change could effectively erase the latest tariffs that were imposed on many consumer electronics.

The exemptions, if they remain, signal that for now, smartphones, chips and other devices won't face tariffs at the same rate currently imposed on goods imported from China. As the U.S. and China subsequently raised tariffs on each other's products in rapid succession, Apple was among the companies with the most at stake because it makes most of its devices in China.

Exemptions would also mark an initial victory for the tech industry in the new Trump administration. Executives flocked to Mar-a-Lago after Trump was elected and donated millions to his inauguration. So far, their efforts hadn't resulted in many public victories. Many of the companies continue to face antitrust cases and are lobbying for favorable artificial-intelligence regulation.

The tech exemptions excluded 20 categories of products from levies Trump imposed in his April 2 executive order, which mandated the 10% on almost all U.S. imports and set higher rates on imports from some countries. Trump later boosted the level of these "reciprocal" tariffs on China to 125%, and issued a 90-day pause on tariffs above 10% for other countries.

The biggest impact from the exemption is on imports from China, because of the heights to which tariff rates had risen in recent days. In addition to the reciprocal tariffs, the Trump administration has imposed tariffs of 20% on Chinese imports over that nation's role in the fentanyl trade, which the White House said aren't subject to the exemptions.

"This represents a small step by the U.S. in correcting its erroneous unilateral approach," said a statement from China's ministry of commerce.

The tech products will soon get separate sectoral tariffs along with semiconductors following a Section 232 investigation, Lutnick said on ABC Sunday. "This is not a permanent sort of exemption," he said. Section 232 allows a president to adjust imports that pose a threat to national security and is also being used for other sectoral tariffs like autos and potentially pharmaceuticals.

Lutnick recently called some computer-industry chief executives and told them consumer products would be part of the coming semiconductor action, according to a person familiar with the matter.

The exempted tech products accounted for roughly $100 billion in U.S. imports from China in 2024, according to Census Bureau data, or 23% of total imports from the country. Last year, 26% of all imports of the excluded products were from China -- but 81% of smartphones and 78% of computer monitors came from there.

Administration officials have said tariffs on China would encourage the manufacturing of electronics in the U.S. Lutnick recently told CBS News "great American workers" would build and operate new factories in the U.S. and an "army of millions and millions of human beings screwing in little screws to make iPhones, that kind of thing, is going to come to America."

Some analysts say the exemptions highlight the chaotic nature of Trump's trade policy, adding that it is unrealistic to move manufacturing to the U.S. in many industries because of high labor costs and other factors. There are no substitutes for these products in the U.S. and price increases would be unpopular as consumers have been battered by high inflation in recent years.

"We welcome [this] action on exemptions and encourage the administration to continue to take steps towards a comprehensive exclusion process," said Sean Murphy, executive vice president of policy at the Information Technology Industry Council, a trade group.

Tech executives generally haven't criticized Trump's tariffs publicly. Only a few tech companies, including Hewlett Packard Enterprises and Dell Technologies, have reported earnings since trade uncertainty surged in February. They warned that tariff uncertainty would ding business.

White House officials said they are in the process of negotiating trade deals and have been approached by more than 70 countries, although details have been scarce and it is unclear how much progress has been made. Administration officials said they have held initial discussions with Japan, Taiwan and Israel.

Trump told reporters over the weekend he is "very comfortable" with where tariffs are currently set with China but expressed optimism that he will be able to reach some kind of deal with President Xi Jinping.

But the administration is not yet talking to China, Navarro said. "We have opened up our invitation to them," he said on NBC's "Meet the Press." U.S. Trade Representative Jamieson Greer said that calling the administration's latest tariff backtrack an exemption isn't the "right word" for the shift involving electronics.

"This type of supply chain moved from the tariff regime, for the global tariff, the reciprocal tariff, and it moved to the national security tariff regime where we have studies ongoing for pharmaceuticals, for semiconductors, metals, et cetera," he said. "It's shifting from one bucket of tariffs to a different bucket of potential tariffs."

Write to Amrith Ramkumar at amrith.ramkumar@wsj.com and John McCormick at mccormick.john@wsj.com

(END) Dow Jones Newswires

April 13, 2025 16:23 ET (20:23 GMT)

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