Howard Lutnick, Secretary of the U.S. Commerce Department, has been sounding the alarm on what’s to come with loss of tariff exemptions for specific electronics. He cautions that these reprieves can’t last forever. Lutnick further focused on the technology exemption on smartphones, computers and most other tech devices from reciprocal tariffs, which Trump placed on them. During his appearances on ABC News’ This Week and NBC News’ Meet the Press, he cautioned that this state of affairs might not last.
Lutnick’s unclear rhetoric and statements have sent some of the tech giants, including Apple, scrambling. They do not believe these exemptions will provide any sustainable relief. He noted, “They’re exempt from the reciprocal tariffs, but they’re included in the semiconductor tariffs, which are coming in probably a month or two.” In fact, this comment signals that the tech sector is likely to start dealing with unintended consequences of new tariffs as they go into effect.
As well, the Administration’s Commerce Secretary made a strong case for the future need of self-sufficiency in producing critical products inside the United States. He stated, “These are things that are national security that we need to be made in America.” Lutnick’s comments further emphasize a fast-growing concern from U.S. officials about the value of having goods, especially those deemed essential, manufactured domestically.
In all of his talks, including our interview, Lutnick begged that the current exemptions not be viewed as long-term fixes. “So this is not like a permanent sort of exemption,” he said. “He’s just clarifying that these are not available to be negotiated away by countries.” This statement highlights the administration’s firm stance on ensuring that key products are made domestically for both economic and security reasons.
In exchange, Lutnick delivered a stern warning to his fellow tech moguls. He warned them not to rely on tariff exemptions to keep their businesses afloat. The ambiguity in what tariffs would be imposed, and when, has industry leaders on edge, with many expressing concern over interfering with fragile supply chains.
Unfortunately, Democratic Senator Cory Booker of New Jersey said he’s not very bullish on President Trump’s credibility for implementing fair tariff policies. He remarked, “President Trump now has a crisis in credibility,” adding, “We’re hearing from around the world. People just don’t know if they can trust him.” Booker’s remarks reflect a broader skepticism regarding the administration’s approach to trade and international relations.
As the situation develops, Lutnick’s emphasis on national security and manufacturing may signal a shift in policy priorities for the Trump administration. The separate tariffs for electronics, set to be implemented in July 2018, only makes the landscape more difficult and confusing for tech companies trying to navigate these changes.