Sun, 13 Apr 2025

Sun, 13 Apr 2025 Faisal Islam: Trump's iPhone olive branch is a significant trade war retreat

Exempting electronics from US tariffs is a stunning about-turn by the Trump administration after 10 days of chaos.
A surprising exemption from US tariffs has been quietly implemented, benefiting Chinese exports including smartphones and other electronic devices. The code "8517.13.00.00" represents smartphones in US customs lists, meaning they are exempt from the 125% tariff on goods entering the country from China. This means Apple's iPhones, which account for a significant portion of the company's sales, will not face the higher tariffs. In fact, it is estimated that up to 80% of Apple's iPhones intended for US sale are made in China, and with profit margins between 40-60%, the impact on prices would have been significant if the exemption had not been granted. According to research firm Counterpoint, iPhone prices could have risen by as much as $1,000 (£760) in the US market due to the tariffs. However, thanks to the exemption, Apple will be able to avoid a major price hike and continue selling its devices without significant disruption. The exemption is part of a broader trend where the US has been excluding certain products from tariffs, with over 25% of China's total exports now exempt from the 125% tariff.
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