Tariffs, tech and an opportunity for India

Tariff exemptions, announced heading into the weekend, are likely to be temporary, US President Donald Trump confirmed in a post on Truth Social.

- Vishal Mathur

NEW DELHI: 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.