Trump Signals Semiconductor Probe, Dismisses Tariff Exemptions for Chinese Electronics

 Washington, D.C., April 14, 2025 – President Donald Trump has vowed to initiate a comprehensive national security investigation into the semiconductor industry and the broader electronics supply chain, signaling a hardline stance on trade with China. In a Truth Social post on Sunday, Trump dismissed reports of tariff exemptions for smartphones, laptops, and other electronics, clarifying that these products remain subject to existing 20% tariffs, often referred to as “Fentanyl Tariffs,” and have merely been reclassified under a different tariff category. “No one is getting off the hook,” he emphasized.

The announcement follows the White House’s Friday decision to temporarily exclude certain electronic products from steep reciprocal tariffs on Chinese imports, a move that had initially buoyed U.S. stock markets. Shares of tech giants like Apple and Nvidia were poised to rally after a 90-day tariff reprieve was granted. However, Commerce Secretary Howard Lutnick clarified on Sunday that critical technology products, including smartphones and computers, will face new duties within one to two months, alongside targeted tariffs on semiconductors and pharmaceuticals. These levies, Lutnick noted, will be distinct from the reciprocal tariffs and aim to bolster domestic production. “This is about national security and ensuring these products are made in America,” he stated in an ABC interview.

Trump’s remarks underscored a broader commitment to reducing U.S. reliance on foreign manufacturing, particularly from “hostile trading nations like China.” The investigation into the semiconductor sector is expected to scrutinize vulnerabilities in the electronics supply chain, with potential implications for global trade dynamics.

China’s Ministry of Commerce responded by framing the temporary exemptions as a step toward correcting what it called the U.S.’s “erroneous” tariff policies, urging Washington to dismantle the entire regime. Zhang Li, president of the China Center for Information Industry Development, told China Daily that the exemptions highlight China’s critical role in U.S. tech manufacturing and innovation. Meanwhile, a spokesperson for China’s Customs agency acknowledged the challenging trade environment but expressed confidence in the country’s diversified markets and robust domestic demand.

The U.S.-China standoff has intensified since Trump imposed sweeping tariffs targeting Chinese imports, with U.S. levies on China reaching 145% and Beijing retaliating with a 125% tariff on American goods. On Friday, China declared it would disregard further U.S. tariff hikes, citing diminished market viability for U.S. products. Chinese President Xi Jinping, speaking on Monday, warned that protectionism “leads nowhere” and that trade wars yield “no winners.” Xi’s upcoming visit to Vietnam signals China’s efforts to strengthen regional ties amid escalating tensions.

Trump’s tariff policies have roiled financial markets, with the S&P 500 declining over 10% since his inauguration on January 20. A 90-day tariff pause for most trade partners, excluding China, failed to stabilize markets, as investors grappled with policy reversals, a weakening dollar, and declining consumer confidence. Senator Elizabeth Warren criticized the administration’s approach, stating on ABC’s This Week that the tariff strategy reflects “chaos and corruption,” a remark made prior to Trump’s latest clarification.

As the world’s two largest economies engage in tit-for-tat measures, the fallout from Trump’s trade agenda continues to reverberate, raising concerns about inflation and economic growth in the U.S. and beyond.