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Tariff exemptions, announced heading into the weekend, are likely to be temporary, US President Donald Trump confirmed in a post on Truth Social. He said the US was “taking a look at Semiconductors and the WHOLE ELECTRONICS SUPPLY CHAIN in the upcoming National Security Tariff Investigations”. That could be as early as next week — for now, semiconductors, computers and smartphones from China will still be subject to a 20% tariff (the base tariff is 10%) instead of the 145% tariffs on other Chinese goods.
It is difficult to assess the long-term impact of the tariff moves given the dynamic nature of Trump’s decisions.The administration’s focus, as US Commerce Secretary Howard Lutnick said in a media statement, points to an urgent “need to have these things made in America.” (He mentioned semiconductors, chips and flat panel displays, to illustrate his point). That’s already happening.
In February, Apple announced a $500 billion investment plan spread over the next four years that includes opening a new server manufacturing facility in Houston, for AI infrastructure, expanding the US Advanced Manufacturing Fund to $10 billion, and creating a training academy in Detroit for workforce development.
Intel is building new chip manufacturing plants in Ohio to enhance domestic semiconductor production, a $20 billion investment.
To be sure, this is happening in other sectors as well. Hyundai, for instance, has announced $20 billion investments, including $5.8 billion for a new steel plant in Louisiana.
But the narrative and specifics may again change, in the coming days. But what does this mean for the country’s trade with China? What does it mean for Big Tech? And, more pertinently, what is at stake for India?
Prabhu Ram, head for the industry intelligence group at Cyber Media Research believes the temporary exemption will provide much-needed relief for the global technology sector, easing pressure across consumer electronics, semiconductors, and hardware.
“Especially Apple, which was caught in the crossfire—as well as the broader chip and hardware industries. The exclusion of smartphones and chips is particularly critical in the context of the China tariffs,” he added. But as he pointed out, “long-term uncertainty around US-China trade dynamics remains.”
Experts say that India could benefit, given its large consumer base and an existing electronics manufacturing industry that is already part of global supply chains, but that much will depend on the expected India-US trade deal.
Linda Sui, senior director of global smartphone strategies at research firm TechInsights believes India and Brazil must see this as an opportunity.
“We believe the iPhone manufacturing shift from China toward India will continue and accelerate regardless of the exemption. In 2024, India roughly manufactured 13%- 14% of global iPhones and we expect the ratio will double or even be higher this year.”
There is already movement in that regard. In March, the government of India announced significantly increased budget allocations for key sectors under the Performance-Linked Incentive (PLI) Scheme in 2025-26; this includes electronics and IT hardware which now has an allocation increase from ₹5,777 crore (this was an already revised estimate for 2024-25) to ₹9,000 crore, and automobiles and auto components, from ₹346.87 crore to ₹2,818.85 crore.
Apple, via suppliers such as Foxconn, Pegatron, and Tata Electronics, has detailed plans to increase manufacturing numbers in India; its exports from India are projected to cross $15 billion in 2025.
Micron Technology’s investments in Gujarat for its assembly, testing, and packaging (ATMP) plant and Tata Electronics’ commitment of $152,000 crore ($18 billion) for India’s first major semiconductor fab in Gujarat’s Dholera for 28nm and above chips, are further examples of tech companies announcing significant manufacturing-focused investments in the country.
In 2024, India became the fourth largest market for Apple, after the US, China, and Japan, as shipments reached a record 12 million units in the country, with 35% YoY growth — iPhone 15 and iPhone 13 were the most shipped models.
There is expectation that Apple will expand its iPhone manufacturing in India, with plans to produce 25% of all iPhones in the country by 2028.
“India holds the potential to play a pivotal role in areas like ATMP, PCB (printed circuit boards; critical for electronics components) production, and processing of critical minerals, which are crucial for ensuring semiconductor supply chain stability,” says CMR’s Ram. “With continued focus on building skills, capacities, and robust infrastructure, India could establish itself as a key enabler in the global semiconductor ecosystem.”
Still, smartphone makers including Apple and Samsung, will draw the few positives from this trade war. There is little doubt the tariffs and counter-tariffs, will make purchases more expensive for customers, and impact spending or purchasing power.
“ With the reciprocal tariffs, India possessed a competitive advantage over China and Vietnam, as it would have accelerated diversification away from where the reciprocal tariffs were high compared to India,” points out Abhilash Kumar, industry analyst at TechInsights.
The continued tariff ambiguity, and the costs that come with any tariff imposition, is expected to have an impact on global smartphone shipments through 2025.
Researchers at the International Data Corporation (IDC), in February, estimated worldwide smartphone shipments to grow 2.3% year-over-year in 2025; that translates to 1.26 billion units. That estimate was before the tariff tit-for-tat began. The new numbers are up in the air.
