Key points:
- Consumer electronics get a breather — for now: Trump has paused steep tariffs on consumer electronics, signaling a shift to more strategic, sector-specific protectionism.
- Semiconductors remain in the spotlight: While exemptions offer temporary relief, Section 232-based tariffs could soon target chips and equipment more directly.
- The winners are agile and diversified: Investors should focus on firms with resilient supply chains, U.S. manufacturing exposure, and structural tailwinds like AI infrastructure.
From ‘reciprocal’ to ‘sectoral’ tariffs
Trump’s tariff policy just took a sharp turn — again. In what some are calling a strategic reprieve, the White House has excluded major electronics categories from the steepest round of tariffs, which originally imposed a 145% levy on Chinese goods and 10% on imports from other countries.
This move signals a shift from country-specific reciprocal tariff strategy to sector-focused protectionism. While the 20% China tariff remains in place — especially targeting fentanyl-related imports — the U.S. appears to be laying the groundwork for new semiconductor-focused tariffs under Section 232, a national security clause that could make these duties more durable and harder to reverse.
Who wins (for now)?
- Smartphone makers: Apple avoids the harshest blow, although China-made iPhones still face 20% tariffs. Samsung may also benefit as it could get excluded from the 10% global baseline tariff on South Korea.
- Chip stocks: Nvidia, Broadcom, Super Micro, Intel, TSMC could gain from exemptions on semiconductor equipment.
- Big Tech and other Mag 7: Microsoft, Tesla, Amazon, Alphabet, and Meta remain in focus given their exposure to digital infrastructure and hardware.
- PC makers & server players: Dell and Hewlett Packard Enterprise (HPE) benefit from lower tariffs on servers and components.
- Suppliers to US fabs: ASML (Netherlands) and Tokyo Electron (Japan) could benefit indirectly from ongoing investment in U.S.-based semiconductor manufacturing.
However, the reprieve may be short-lived, and tech stocks could remain in the crosshairs. Semiconductors are no longer just another component — they’re the lifeblood of modern economies. From AI to EVs and cloud computing, chips power everything.
The administration’s delay in announcing tariffs on semiconductors might reflect awareness of their systemic importance — or, as some suspect, a strategic pause amid bond market volatility and potential market backlash.
Who loses (or still at risk)?
- Apparel & footwear: No relief in sight. These sectors continue to face tariffs of up to 145% on Chinese goods.
- Pharma: It has been announced that special sectoral tariffs on drug companies could follow — a risk for global drug supply chains.
What should investors watch?
- Policy volatility: The U.S. Commerce Secretary has already called this reprieve temporary. That means markets could be whipsawed again if Trump reintroduces electronics duties or implements new semiconductor-specific tariffs.
- Capex planning uncertainty: With U.S. policies swinging between unilateral tariffs and sectoral exemptions, companies may delay investment decisions. That favors diversified, agile players over those tightly tied to China.
- Themes to consider:
- Reshoring and U.S. manufacturing: The CHIPS Act plays into this, alongside tariffs. Domestic manufacturers and U.S. suppliers are likely to remain on the front foot.
- “Tariff-proof” supply chains: Companies with significant non-China exposure — including Vietnam, Mexico, and India — could be less vulnerable.
- AI infrastructure buildout: The exemption on servers and PC hardware could support continued investment in AI data centers, benefiting select semiconductor and hardware plays.
Investment implications: Prepare for the long game
1. Watch for repricing in chip stocks
A new round of tariffs on semiconductors could weigh on companies heavily exposed to China or reliant on complex global supply chains. Investors may want to:
- Reassess positions in firms with China-centric revenue or supply exposure.
- Look at domestic chipmakers or those with diversified production footprints.
2. Favor supply chain winners and “tariff-proof” names
Companies with resilient, domestic-oriented supply chains or those with unique IP may weather this storm better than others. Think:
- Asset-light or IP-driven chip firms like ARM or Nvidia
- Foundries and equipment makers less dependent on exports
3. Build exposure to re-shoring and “silicon sovereignty”
With semiconductors labeled as critical infrastructure, expect continued momentum behind reshoring and “silicon sovereignty” themes:
- U.S. Chips Act beneficiaries. Companies like TSMC, Samsung and Intel are building new US factories with support from the 2022 Chips and Science Act.
- European firms aligned with the EU’s strategic autonomy agenda.
- Taiwan and Japan players expanding globally and forming supply chain partnerships.
Bottom line: Don’t mistake relief for stability
Trump’s tariff policy continues to be a moving target. While the latest reprieve delivers a short-term win for electronics and AI-related players, the broader trend toward protectionist industrial policy remains firmly intact.
For investors, the message is clear:
- Prioritize agility, resilience, and policy awareness.
- Focus on companies with strategic positioning in AI, semiconductor sovereignty, and non-China supply chains.
- And above all, prepare for volatility as the new normal in global tech investing.