Tech Stocks Surge as US Eases Tariffs on Smartphones and Chips

Global tech markets rebound after the US exempts smartphones, laptops, and chips from China tariffs, easing investor concerns.

Relief Rally: Tech Stocks Rebound as US Pauses Tariffs on Key Electronics

In a rare moment of respite amid escalating trade tensions, global technology shares staged a robust recovery on Monday following the White House’s decision to temporarily exempt a suite of electronics from its sweeping tariffs on Chinese imports. The exemption list—spanning smartphones, laptops, computer hardware, and semiconductors—sparked renewed investor optimism in a sector battered by fears of soaring costs and disrupted supply chains.

The news comes as a lifeline for an industry that has been navigating one of its most volatile stretches since the COVID-19 pandemic. Tech giants and hardware manufacturers alike have watched their stock values slide in recent weeks, triggered by tit-for-tat trade measures between Washington and Beijing. The sudden rollback of tariffs—at least on consumer electronics—appears to signal a subtle shift in U.S. trade strategy, reflecting mounting concerns over inflation and consumer backlash.

A Reprieve for Apple and Its Supply Chain

Shares of Apple Inc. (AAPL) jumped 3.5% in Monday trading, snapping a two-week losing streak that had seen the tech titan fall over 9%. Analysts had warned that the iPhone, largely assembled in China and imported into the U.S., was at serious risk of price hikes that could ripple through its global customer base. The tariff exemptions may have pulled Apple back from the brink—at least for now.

“It’s a relief rally,” said Alberto Gegra, an equity analyst at Equita. “This exemption avoids the worst-case scenario for Big Tech and supply chains already under pressure. It won’t solve everything, but it’s a pause button the industry needed.”

The bounce wasn’t limited to Apple. HP (HPQ) and Dell Technologies (DELL), major players in the personal computing space, gained 3.5% and 5.9%, respectively. Semiconductor powerhouse Nvidia (NVDA) also saw a 1.5% uptick, reflecting broader optimism across the chip sector.

Global Ripple Effect: Europe and Asia Respond

The U.S. decision reverberated through global markets, lifting European chipmakers with significant exposure to American buyers. Dutch-based ASM International and Germany’s Infineon Technologies both posted gains between 1.4% and 3.2%.

Meanwhile, Asian supply chain partners, particularly those tied to Apple’s ecosystem, also rode the wave. Foxconn, the world’s largest iPhone assembler, surged nearly 8% before paring gains to close up 3%. Taiwan’s Quanta Computer and Inventec, which specialize in laptops and AI servers, respectively, climbed 5.8% and 4.1%.

These moves reflect investor hopes that the supply chain might stabilize—at least temporarily—under the new trade reprieve. But that optimism comes with an asterisk.

A Temporary Lifeline?

The U.S. Trade Representative’s office revealed that 20 product categories would receive exemptions, including smartphones, laptops, semiconductors, memory chips, and flat-panel displays. The timing was crucial: multiple manufacturers had begun preparing for steep price hikes as tariffs on some Chinese goods crept toward the 100% mark.

“This shift acknowledges the practical pain tariffs inflict—not just on producers, but on consumers already grappling with high inflation,” said Angelo Zino, senior equity analyst at CFRA Research. “It gives supply chains breathing room to recalibrate. But we have to recognize this may be short-lived.”

Indeed, within 48 hours of the exemption news, President Trump indicated that new tariffs targeting imported semiconductors would be rolled out in the coming days as part of a broader push to reshore tech manufacturing. Commerce Secretary Howard Lutnick confirmed that even the currently exempt electronics may face separate duties within the next two months.

Strategic Stockpiling and Inventory Moves

With the tariff window open, U.S.-based tech firms may rush to build up inventories. By stockpiling components now—while the tariff exemptions are still in place—manufacturers can cushion themselves against future supply shocks or price surges.

“Smart companies will use this period to aggressively restock,” Zino added. “Even if chips face moderate tariffs later, the current situation is far better than the 145% duties we were staring down just weeks ago.”

The implications for global production strategies are significant. Companies may shift assembly locations, reroute logistics pipelines, or accelerate diversification efforts to reduce dependence on Chinese manufacturing—all while still prioritizing speed-to-market.

Consumer Impact and Inflation Considerations

Behind the policy maneuvering is a more immediate concern: consumer affordability. With inflation still outpacing wage growth in the U.S., another wave of tech price hikes could land hard on American wallets. Smartphones, laptops, and connected devices are no longer luxury items—they’re household staples.

“Increasing the cost of these products would have been politically risky and economically damaging,” said Dr. Elaine Morris, an economist at the Peterson Institute for International Economics. “This exemption isn’t just about corporate margins—it’s about household budgets.”

According to a 2024 Deloitte survey, over 72% of Americans replaced or upgraded at least one major tech device in the past 18 months, underlining just how integral these products are to daily life and work.

Trade Policy vs. Tech Industry Realities

While the Trump administration has long advocated for a decoupling from Chinese supply chains, this latest exemption shows a more nuanced understanding of the complexities involved. The tech sector doesn’t operate on ideological timelines—it runs on logistics, demand cycles, and microscopic margins.

“Supply chain interdependence won’t vanish overnight,” said Jenny Park, a trade lawyer and partner at McKenna & Park. “Even with tariffs, rerouting operations out of China requires capital, time, and trusted alternatives. The U.S. may be aiming for reshoring, but the road is long.”

At the same time, the move could be viewed as a strategic olive branch—softening rhetoric without fully abandoning the administration’s broader protectionist goals. With a presidential election looming, even symbolic gestures of economic relief carry political weight.

The Road Ahead: Uncertainty Lingers

Despite Monday’s bounce, markets remain cautious. The tech industry is acutely aware that today’s exemptions can become tomorrow’s bargaining chips in a volatile trade-negotiation landscape.

Investors are closely watching upcoming tariff announcements, especially regarding semiconductors—a cornerstone of both consumer tech and critical infrastructure. Any escalation there could ripple across everything from smartphones to electric vehicles to AI data centers.

“Tech is the new oil,” said Morris. “Every part of modern society depends on it, and that makes it a geopolitical pressure point. We’re not done with this story—not by a long shot.”

A Temporary Win in a Long Battle

The U.S. decision to ease tariffs on smartphones, laptops, and other electronics has injected a much-needed jolt of optimism into global tech markets. For companies and consumers alike, the exemptions offer temporary breathing room and a chance to recalibrate strategies in an increasingly complex trade environment.

But this is not the end of the tariff saga—it’s a strategic pause. As policymakers weigh national security, inflation control, and economic competitiveness, the future of tech trade remains deeply uncertain. Companies that use this window wisely—by rethinking supply chains, boosting resilience, and preparing for policy shifts—may emerge stronger.

In the meantime, investors can enjoy the rally—but they should keep one eye on Washington.

Source:  (Reuters)

(Disclaimer:   This article is intended for informational purposes only and does not constitute financial, investment, or legal advice. Readers should consult with a qualified professional before making any decisions based on the content provided.)

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