Partial US reciprocal tariff rollback resets global tech play

The ongoing trade tussle between the US and the rest of the world increasingly looks like a war between the US and China, though other countries are equally impacted. However, with major tech manufacturers like Apple offshoring their production to China, the country has found itself in the driver’s seat.

 “In the days since Trump’s tariff announcement, Apple lost over USD 640 billion in market value,” CNBC reported. The cost of an iPhone under Trump’s tariff plan could have ballooned to as high as USD 3,500 under some estimates, according to the report.

The impact of Trump’s tariffs was felt far and wide, with questions raised about whether they were truly necessary. Former US President Biden handed the US economy to Trump in good shape—if not thriving, at least steady—with lower unemployment rates. But increasingly, Trump’s trade war and the ensuing tariffs may hurt the US more than any other country. For instance, the US offshores almost everything—even American flags are ‘Made in China’.

Tariffs Challenge the Offshore Manufacturing Model

US manufacturers have thrived on labour arbitrage, and Trump’s move seems more jingoistic than practical. The short-term impact is more painful than the long-term benefits, and the course correction domestic manufacturers need to make—from offshore to onsite—cannot be achieved in weeks. It is a long haul, requiring both strategy and investment.

Trump’s 90-day pause on tariffs, setting a baseline of 10% for most countries while holding firm on a 125% tariff on Chinese imports, rattled the US electronics manufacturing sector. Against this backdrop, the Trump administration’s announcement of tariff exemptions on phones, computers, and chips could not have come at a better time, with consumers in the US indulging in panic buying and hoarding in recent days.

Consumer Electronics Spared, But Just in Time

In global trade, timing is everything—and few understand this better than US electronics manufacturers. The Trump administration’s aggressive new tariff regime, including a mind-boggling 125% duty on Chinese imports, was seen more as a ‘nail in the coffin’ than a move to enable economic growth. In this context, the last-minute exemption for consumer electronics came as a much-needed breather.

The news could not have come at a better time for companies like Apple. According to multiple news reports, Apple had quietly moved a massive shipment of over 1.5 million iPhones into the US just ahead of the original tariff rollout. It was a strategic move—no doubt calculated with surgical precision—to avoid what was feared to be a price spiral.

Fast-forward to today, and the landscape looks a little less daunting. The Biden-to-Trump trade policy continuum has kept global supply chains on edge, but with this specific exemption—covering smartphones, laptops, memory chips, servers, and monitors—there is a tangible sense of relief. “Best news possible,” said analysts quoted in Investors.com, pointing to the positive stock market ripple effect.

Still, the exemption applies only to select categories and only temporarily. Audio products such as headphones and AirPods are notably absent from the exemption list, leaving them exposed to over 100% tariffs when exported from China. In comparison, India and Vietnam face only 10% duties on the same.

Moreover, while China has seen reciprocal tariffs lifted, key exports including iPhones, laptops, tablets, and watches are still subject to a 20% tariff. In contrast, India and Vietnam currently enjoy zero tariffs on smartphone, laptop, and tablet exports to the US—effectively creating a 20% advantage over China.

India’s Quiet Rise in the Electronics Equation

This is where India becomes increasingly relevant. The country's Production-Linked Incentive (PLI) schemes and growing iPhone assembly units make it an attractive hedge against overdependence on China. Vietnam, meanwhile, has similar advantages: zero tariffs, established manufacturing bases, and strong logistics linkages.

For US electronics manufacturers, this new tariff carve-out does not just mean breathing space—it signals that global tech trade still holds some room for pragmatism. It offers them a chance to de-risk from China-centric manufacturing models and consider scaling aggressively in India and Vietnam, which now provide clear tariff advantages on smartphones, laptops, and tablets.

Pankaj Mohindroo, Chairman of the India Cellular and Electronics Association (ICEA), summed up the mood succinctly: “Respite from reciprocal tariffs for smartphones and others. Now there will be no extraordinary disruption. Time to set up capacities. The long-term trend against China will remain robust. But the incredible shock of the last few weeks is a tectonic event—and the realignments are bound to happen without too much blood spilt in our category.”

However, this shift also requires a change in mindset. One must assess how India and Vietnam compare to China in terms of ease of doing business and infrastructure. Beyond labour costs, there are numerous variables when shifting manufacturing at scale.

Experts say that US manufacturers need to embrace supply chain localisation with a more balanced approach. Instead of shifting entire operations to the US—a prohibitively expensive move given labour costs and infrastructure bottlenecks—companies are expected to push for regional diversification, with countries like India and Vietnam coming into sharper focus, especially as they already host a significant presence.

Meanwhile, from a consumer standpoint, this latest exemption decision has defused a ticking price bomb and eased uncertainty. In other words, iPhone prices will not spike overnight, gaming rigs will not become luxury items, and enterprise hardware upgrades will not be held hostage to global politics.

Still, it is not all roses. Tariff uncertainties have a way of lingering, and political winds are ever-shifting. A single trade policy pivot could undo months of planning. But for now, this exemption is a win—measured, yes, but meaningful and grounded.