China Responds to Trump’s Surprising Tariff U-Turn on Electronics Imports

China Responds to Trump's Surprising Tariff U-Turn on Electronics Imports

The Chinese government has responded to the decision by the Trump administration to exempt smartphones and laptops from tariffs, calling it a small step towards a necessary adjustment. In a statement released by the Chinese Ministry of Foreign Affairs, it was stated:

“This is a small step by the United States to correct its mistaken approach of unilateral ‘reciprocal tariffs’.”

The ministry also called on Washington to take a “large step towards the complete abolition of illegal measures and return to the right path of resolving differences through equal consultation and mutual respect.”

In April, President Trump announced massive tariffs on almost all global trading partners of the United States. Initially, the US president imposed a minimum tariff of ten percent. In a further step, tariffs of significantly higher levels were imposed on around 60 trading partners on Wednesday of the previous week.

Due to the massive global stock market turbulence, Trump subsequently retreated and announced that the tariffs would be suspended for a period of 90 days. This did not apply to the People’s Republic of China, which Trump had identified as the US’s main rival. The total US tariffs on China had recently reached 145 percent. As a response, Beijing announced an increase in tariffs on US imports to 125 percent. Internationally, it was expected that the escalating trade war would have serious consequences for the world economy.

On Friday, Trump made an unexpected retreat: the recently increased tariffs on electronic devices such as smartphones, computers, semiconductors and storage media will be temporarily suspended. The US Customs and Border Protection agency announced this on Friday evening. The customs relief applies further to hard drives, processors, solar modules, USB flash drives, flat screen TVs and other devices. The regulation is retroactive for imports from April 5th.

The measure is expected to particularly relieve US technology giants like Apple, whose devices are largely produced in China. With Trump’s retreat, the trade war between Washington and Beijing could now be partially defused.

On Saturday, Trump also announced that he would provide a “very concrete” answer on Monday to the question of possible future tariffs on semiconductors. Semiconductors, like drugs and copper, are currently excluded from the ten percent tariffs. However, the White House has recently reported that Trump is considering industry-specific tariffs on semiconductors.