The Biden-Trump transition may still linger in political memory, but Trump’s enduring influence on trade policy continues to send shockwaves through the global tech supply chain. The recent announcement of exemptions on select electronic goods from the USA’s steep 125% “reciprocal” tariffs, a significant burden for Chinese electronics firms, has offered a faint ray of hope to major Chinese suppliers catering to American tech giants such as Apple and Tesla.
Yet for the broader Chinese electronics sector, especially smaller firms, the future remains alarmingly uncertain. While exemptions cover high-end devices like smartphones, laptops, memory chips, and semiconductor equipment, many firms producing mid- to low-end tech have been excluded. Introduced in an abrupt move by the Trump administration, the policy has stumped analysts and industry insiders alike with its lack of clarity and neatness. “It’s almost so arbitrary,” said Chen Zhiwu, a chair professor of finance at the University of Hong Kong. “Who knows why they put this exemption list out so soon? Only time will tell how long the 145 per cent tariffs will remain in place?” he asked, pointing to the vagaries of Washington’s policy pendulum.
These tariffs compound on previous levies like a 20 percent duty placed over China’s alleged contribution to the fentanyl crisis, resulting in a complicated and oppression-like array of implications for exporters. The exemptions may signal some acknowledgment of China’s irreplaceable role in global electronics production. In 2024 alone, China supplied over 70 percent of PC monitors and smartphones and 66 percent of laptops imported into the USA, according to US International Trade Commission data. Still, the relief is not reaching everyone.
Smaller manufacturers relying on domestic technology, often without the clout or connections of tech titans, are being left behind. “The threshold is quite high,” said Mark Li, co-founder of HippoBot Technology, a pool-cleaning robot maker. “The exemptions are mainly for high-end precision instruments. For us, shifting production capacity to Thailand for the US market might be more feasible. “Further complicating matters, Trump recently took to social media to assert that “NOBODY is getting ‘off the hook’ for the unfair Trade Balances,” adding that a broader review of the electronics supply chain would be part of upcoming National Security Tariff Investigations. Through US Commerce Secretary Howard Lutnick, his administration confirmed the introduction of “sectoral tariffs” with detailed measures set to be published via the US Federal Register.
Ironically, the uncertainty of US policy may provide China with some space. As for multinationals, if they can lobby and exempt themselves, the urgency to change supply chains may go away. But banking on this loophole is a dangerous gamble; the sword of Damocles still hovers over the industry. With sectoral tariffs looming and geopolitical narratives sharpening, the global electronics supply chain is at the mercy of political calculus. The message to China tech exporters is loud and muddled: move quickly, be nimble, and prepare for the next hand grenade.
For many, this signals that the exemptions are tactical rather than strategic. “This appears to be a political move shielding consumer-critical tech items while maintaining pressure on Beijing,” Chen noted. Given how deeply embedded Chinese manufacturing remains in American consumer tech, it’s also a possible nod to voter sentiment in an election season. Indeed, the reliance is challenging to break. Apple, for example, continues to depend heavily on Chinese precision manufacturing despite growing diversification efforts. In the run-up to the then-about-to-be-imposed tariff, reports emerged that Americans were buying iPhones in ever-greater numbers as retailers shoved inventory as fast as planes could fly it out of Chinese factories (to be followed up by an increase in prices foreseeably).
Zhu Keli, the founder of the International New Economic Research Institute, noted that these logistical and economic realities are leading Washington to soften its position, at least for now. However, he added that the current flexibility should not encourage Chinese firms to be complacent. “This is a moment of opportunity. China needs to utilize it to enhance industrial resilience and penetrate bottlenecks through market-oriented innovation,” Zhu admonished. China’s response, announced hours before releasing the US exemptions list, is part of an escalating tit-for-tat. Yet even as short-term reprieves arise, the broader strategic trajectory remains clear: the USA aims to rebuild domestic manufacturing and reduce dependency on Chinese imports.
Bai Ming, a researcher at the Chinese Academy of International Trade and Economic Cooperation, reinforced the need for long-term adaptation. “Chinese companies must treat this not as a crisis but a structural turning point. Domestic and foreign trade integration should be prioritized to be more than just in emergency programmes,” he said.
Ironically, the uncertainty of US policy may provide China with some space. As for multinationals, if they can lobby and exempt themselves, the urgency to change supply chains may go away. But banking on this loophole is a dangerous gamble; the sword of Damocles still hovers over the industry. With sectoral tariffs looming and geopolitical narratives sharpening, the global electronics supply chain is at the mercy of political calculus. The message to China tech exporters is loud and muddled: move quickly, be nimble, and prepare for the next hand grenade.
