Tech Industry Spared the Worst of Trump's Tariffs

The U.S. tech industry and channel are getting a temporary reprieve from the Trump administration’s sweeping tariff campaign, as most electronic products and semiconductors manufactured in Asia — including China — have been exempted from the trade duties imposed last week.

The exemptions are a surprise, considering that one of the primary goals of the tariff policy was to compel technology vendors, both foreign and domestic, to repatriate manufacturing operations to the United States. The strategy: Make offshore production sufficiently expensive that building domestic factories becomes economically viable, ideally generating middle-class jobs.

Technology stocks were hammered following the April 2 tariff announcement, shedding more than $2.1 trillion in global value. Investors feared that steep duties on core technologies — from smartphones to AI processors — would stall demand and exacerbate supply-chain strain. Vendors warned channel partners of incoming price hikes even before the tariffs formally took effect.

Modern technology production is rarely centralized. Components built in China or Taiwan are often sent to Vietnam, Thailand, or Malaysia for partial assembly, then moved to Mexico for final integration before reaching the United States. Under the original tariff terms, each stop would have incurred duties, driving up the cost of finished goods.

For companies that had previously diversified production out of China to minimize earlier tariff exposure, the new 10% universal baseline tariff threatened to erase those gains. By some estimates, even this modest-sounding rate would raise technology prices by more than 11%. Apple reportedly airlifted over 600 tons of iPhones from India to U.S. warehouses in a bid to beat the deadline. Other vendors followed suit, accelerating shipments and stockpiling key inventory.

The revised policy carves out many foundational technologies essential to enterprise and cloud infrastructure. Among the product categories now exempt from tariffs:

• Servers, desktops, and laptops

• Networking equipment, including switches and routers

• Smartphones and tablets

• Flash memory and solid-state drives

• Monitors and projectors used with computers

• Semiconductor chips and integrated circuits

• Equipment used to manufacture semiconductors and displays

This exemption list recognizes the strategic importance of affordable high-performance computing and network capacity, particularly as AI workloads and data center investments scale rapidly.

However, a significant portion of the IT and electronics ecosystem remains exposed. Products still subject to tariffs include these:

• Ethernet and fiber-optic cables

• Power distribution units, uninterruptible power supplies, and voltage regulators

• Connectors, plugs, adapters, and jacks

• Server racks, network enclosures, and cabinets

• Surveillance systems, including IP cameras and video recorders

• Consumer-focused displays and televisions not marketed for PC use

• Smartwatches, fitness trackers, and other wearables

• IT maintenance tools like cable testers and antistatic devices

• Printers and multifunction peripherals

• Software distributed on physical media (CDs, USB drives), though licenses delivered digitally may be treated separately

More information about technology products covered and exempt from tariffs can be found at the U.S. International Trade Commission's Harmonized Tariff Schedule. 

These categories often fall outside the scope of global technology trade agreements or are classified as general-purpose goods rather than specialized IT equipment, leaving them exposed to higher costs.

The exemptions represent the first tangible policy return for an industry that, unlike during Trump’s first term, offered considerable financial support to his re-election campaign. Tech executives hoped to shape future regulation and economic policy. Tim Cook of Apple, who successfully lobbied for iPhone tariff relief during the first administration, repeated the strategy, pledging billions in domestic investment and overseeing expedited logistics to avoid additional costs.

The 90-day suspension of most non-China tariffs adds short-term stability, but it's far from permanent. China remains excluded from the pause and responded by sharply raising its tariffs on U.S. goods, further escalating trade tensions. Analysts warn this tit-for-tat escalation could reverberate across global markets.

Additional risk looms in the form of a national security investigation into semiconductors, which could result in future duties on chips and related systems, even those currently spared. And with logistics, insurance, and operational uncertainty continuing to rise, tariff-free status offers only partial protection from broader economic strain.

While the reprieve buys the tech industry some time, it doesn't provide a resolution. The Trump administration’s unpredictable trade posture injects volatility into global commerce. Short-term relief is welcome for the channel, but the long-term outlook remains unsettled.

Channelnomics has updated its Channel Recession Survival Guide in light of the Trump tariffs and the economic turmoil they’re causing. The guide, which is complimentary, provides justification and practical guidance for leveraging channel partners to maintain go-to-market capacity and offset budget pressures. 

> CLICK HERE TO GET A COPY OF THE CHANNEL RECESSION SURVIVAL GUIDE.