Trump plans semiconductor tariffs 'very soon' as markets rally on electronics exemptions

Global markets rally despite Trump confirming imminent semiconductor and pharmaceutical tariffs, as exemptions for key electronics offer temporary relief to tech companies and consumers.

President Donald Trump has confirmed that semiconductor tariffs will "take place in the very near future," outlining his administration's determination to reshape global technology supply chains even as markets rallied on exemptions for smartphones and other key electronics from his broader tariff plans.

"Like we did with steel, like we did with automobiles, like we did with aluminum – which are now fully on – we'll be doing that with semiconductors, with chips and numerous other things. And that'll take place in the very near future," Trump told reporters aboard Air Force One.

Tech-specific tariffs still coming despite exemptions

The president's remarks came just days after the White House offered significant relief to tech companies and consumers by exempting smartphones, laptops, and certain semiconductor products from the steepest tariffs announced earlier this month. However, Trump emphasized that these exemptions are temporary and limited.

"That's going to be announced very soon, and we'll be discussing it, but we'll also talk to companies. You know, you have to show a certain flexibility. Nobody should be so rigid," Trump said when asked about potential tariffs on electronics such as iPhones and tablets.

Trump later stated on his Truth Social platform that "NOBODY is getting 'off the hook'," highlighting that smartphones are still subject to 20% levies that could rise higher. This mixed messaging has created uncertainty for tech companies and investors trying to assess long-term impacts.

Commerce Secretary Howard Lutnick added to the confusion by stating that electronic devices would be "included in the semiconductor tariffs which are coming in probably a month or two," signaling that the administration's strategy continues to evolve.

Domestic manufacturing goals drive pharmaceutical tariffs

Beyond semiconductors, Trump indicated that tariffs on pharmaceuticals would also be announced "very fast," citing national security concerns rather than purely economic objectives.

"We're going to have our drugs made in the United States, so that in case of war, in case of whatever, we're not relying on China and various other countries, which is not a good idea," he said.

This expansion of tariffs to pharmaceuticals represents a significant escalation of Trump's "America First" manufacturing policy, aiming to reduce dependence on China for critical supplies while potentially raising healthcare costs for American consumers.

Markets rally despite escalating trade tensions

Despite the confirmation of impending semiconductor and pharmaceutical tariffs, global markets have shown surprising resilience, focusing instead on the temporary relief offered by electronics exemptions.

The US 500 gained 0.8% to 5,405 points and the US Tech 100 rose 0.6% to 16,831 points. European indices posted even stronger gains, with the EuroStoxx up 2.7% to 449 points and the FTSE 100 rising 2.1% to 8,134 points.

Asian markets also responded positively, with Japan's Japan 225 gaining 1.2%, Hong Kong's Hong Kong HS50 up 2.2%, and mainland Chinese exchanges climbing between 0.8% and 1.2%.

Kevin Hassett, director of the US national economic council, dismissed growing recession concerns, telling Fox Business there was "100% not" a risk of economic contraction this year despite mounting trade tensions.

China downplays tariff impacts as Xi seeks regional allies

Chinese officials have played down the potential damage from Trump's tariffs, with customs administration spokesperson Lyu Daliang insisting that "the sky won't fall" for Chinese exports. Speaking to state-owned agency Xinhua, Lyu emphasized that China has successfully diversified its trade away from the US in recent years.

"These efforts have not only supported our partners' development but also enhanced our own resilience," Lyu said, highlighting China's strategy to reduce dependence on American markets.

The customs report also emphasized China's "vast domestic market" as a buffer against external pressures, reflecting Beijing's longer-term strategy of stimulating domestic consumption to reduce export vulnerabilities.

Meanwhile, Chinese President Xi Jinping has embarked on a three-nation Southeast Asia tour starting in Vietnam, where he called for stronger ties on trade and supply chains amid disruptions caused by US tariffs.

"There are no winners in trade wars and tariff wars," Xi wrote in an article published in Vietnam's state-run Nhan Dan newspaper. During meetings with Vietnamese officials, Xi urged the two countries to "jointly oppose unilateral bullying, and uphold the stability of the global free trade system as well as industrial and supply chains," according to Chinese state media Xinhua.

The timing of Xi's regional tour—visiting Vietnam, Malaysia, and Cambodia—appears strategically calculated to strengthen regional economic ties as a counterbalance to US tariff pressures.

Consumers and companies begin feeling tariff impacts

While markets have responded positively to partial tariff exemptions, consumers are already experiencing price increases in some sectors. Sony recently raised the price of its PlayStation 5 by 25% in certain markets across Europe, the Middle East, Africa, and Oceania, citing "a challenging economic environment" linked to Trump's tariffs.

For technology companies, particularly those with complex global supply chains, the uncertainty has disrupted planning and pricing strategies. Apple shares have slumped 23% from their December peak, while Nvidia has fallen 25% since January, highlighting investor concerns about the potential impact of semiconductor tariffs on two of the market's most influential tech companies.