Trump downplays exemptions on electronics and announces new duties on tech. China blocks exports of rare earths

'Those products,' he added, referring to smartphones such as Apple's iPhones, computers and chip machines currently spared from the reciprocal duty category, 'simply ended up in another tariff bracket.

Commerce Secretary Howard Lutnick in turn described the exemption on electronics as temporary and indicated that duties on chips and tech are expected within sixty days. Products exempted today, he indicated, "are included in duties on semiconductors, probably coming within a month or two. Duties on iPhones, he pointed out, may also come into play here, without clarifying whether directly or indirectly because of the chips used: 'We have to take our medicine and we have to make semiconductors and electronics in America. Apple now produces 80 per cent of its iPhones in China.

It is a medicine, the one proposed by Lutnick, that for many economists is not only bitter but ineffective and counterproductive. Hardly any analysts believe that complex global manufacturing chains such as the tech industry can be reinvented by tariff shocks. Rather, the more likely scenario is one of spiralling downturns, inflation and investment uncertainties, which can damage competitiveness and innovation.

The exemption on electronics currently in place, however, offers at least a measure of immediate relief to brands from Apple to Nvidia and Google, as well as Taiwan Semconductor and Samsung. The many tech products pardoned for the time being account for 23% of US imports from China and bring down the overall average US effective tariffs to 22% from 27% previously. Those average duties, however, remain up dramatically from 2.3% last year. Compared to imports from China as a whole they are now 106% instead of 145%.

There are still separate 20% tariffs in force against China on fentanyl, which also affect electronics. The exemption for smartphones and PCs, as well as accessories, chip-making machinery, solar cells and flat screens, however, concerns 125% barriers raised against Beijing under the label of reciprocal duties. Also suspended for such products is a universal 10% duty against all countries, thus for Asian nations that are themselves crucial to the technology supply chain, from Taiwan to Vietnam and India. Exempted in this way for now are two thirds of imports from Taiwan, 44% from Malaysia and 30% from Vietnam and Thailand.

Faced with the heavy unknowns that remain over Trump's trade policy, hedge fund guru Ray Dalio, founder of Bridgewater Associates, said he feared something "deeper" than just a recession. "We are witnessing a breakdown of the monetary, political and geopolitical order," he said. 'We are at a decisive moment, very close to a recession,' he continued, 'and I fear something worse if the situation is not handled well.