US stock markets expected to recover after Trump drops tariffs on mobiles

Shares in major US technology firms experienced a sharp decline of up to 14% in response to tariffs announced by Donald Trump. However, following the announcement of exemptions for smartphones and laptops, these companies are poised for a potential recovery.

The temporary removal of tariffs for a period of 90 days on products like smartphones, laptops, and certain components is anticipated to benefit key players such as Apple and Nvidia. The decision comes after considerable pressure from Republican leaders who raised concerns about the rising costs of smartphones potentially leading to voter dissatisfaction.

Approximately 80% of all smartphones imported into the US come from overseas, particularly from China, where Trump had imposed tariffs totalling 145%. The exclusions announced by US Customs and Border Protection encompass various electronic goods, indicating a significant shift in the tariff strategy.

During a recent flight aboard Air Force One, Trump indicated that more detailed regulations regarding these exemptions would be clarified soon. While he maintains that the tariffs were necessary for ensuring fair trade practices, the rhetoric surrounding the exemptions suggests some level of reconsideration.

Despite the introduction of these exemptions, the commerce secretary, Howard Lutnick, expressed that they may only be temporary. He reiterated Trump’s commitment to implementing specific tariffs aimed at fostering domestic manufacturing of semiconductors and related products. The administration’s concerns about over-reliance on Chinese imports remain evident.

The implications of these tariffs have been significant for the technology sector, with major firms seeing their stocks plummet following the initial announcement. The recent policy adjustments, however, provide a glimmer of hope for recovery among the big technology players. With the situation still fluid, the focus will remain on how these changes will impact the broader market landscape in the coming weeks.