From Apple to Nvidia, US tech companies have received a temporary exemption from President Donald Trump’s high-speed tariffs. For other companies, the damages imposed by existing taxes on Chinese exports can turn out to be fatal.
Trump has retreated from the edge in most countries, but announced a 90-day suspension on Wednesday for most of his “mutual” tariffs, but he doubled in China, eventually increasing the import tax on goods to 145%.
Trump has pitched his protectionist agenda as essential to reviving American industry. However, many US companies are used for cheap imports from China. For many of them, prices rise and profits fall.
Beijing is also responding to Trump’s moves with a 125% retaliation fee with its own tariffs. US exports to China, particularly agricultural products, will be hit badly by China’s comprehensive collection.
This is the state of trade relations between the two biggest economies in the world and the worst possible US companies.
The state of US-China trade
Despite growing tensions between the US and China, Washington and Beijing remain major trading partners.
The total commodity trade between the US and China was $582.4 billion in 2024, according to data from the US Trade Representative. After Canada and Mexico, China is America’s third largest trading partner.
US imports from China totaled $438.9 billion, while exports were tallied at $133.5 billion. The result is that the US trade deficit with China was $295.4 billion last year than any other country.
On Friday, China’s Commerce Department said tariffs on US goods have increased from 84% to 125% as Beijing repeatedly “fights to the end” shortly after Washington raised US duties on China’s imports to 145%.
Later that day, the Trump administration announced temporary exemptions from Trump’s “mutual” tariffs on smartphones, solar panels and other electronic products, such as semiconductor chips made in China.
The Chinese government welcomed the exemption and urged Trump to go further. However, the US President has said these products will ultimately be subject to their own different collections. To date, they are subject to the 20% tariff Trump imposed on all Chinese products by April 2.
In the meantime, businesses are forced to at least hand over some of Trump’s tariffs to consumers, trying to maintain profit margins. This results in higher inflation and lower business outcomes.
Tariffs could potentially lose 740,000 people in the US by the end of 2025, according to an analysis by Yale Budget Lab. But which sector is most exposed to these trade disruptions?
Textiles and apparel
Prices for Nike trainers, Levi Jeans and Gap T-shirts will almost certainly rise in the US as they undermine the hubs of Asian factories that support the global clothing industry.
In 2024, factories in China, Vietnam and Indonesia made 95% of Nike shoes. Trump has already introduced 145% tariffs on China, but Vietnam and Indonesia are currently facing 10% tariffs.
In particular, Vietnam is considered the major indirect source of Chinese imports by re-routing Chinese products through Vietnamese ports and using Chinese parts in exports to the US.
The gap is also highly exposed to Vietnam’s production processes. Gap’s stocks have fallen 14% since Trump’s “mutual” tariff announcement on April 2nd. For Nike, it’s 14.7%.
Elsewhere, Levi’s share price plummeted 10.6%.
Smartphones and semiconductors
On Friday night, U.S. Customs and Border Protection (CBP) issued a notice waived some technical products from the tariffs imposed on Chinese products.
CBP lists 20 product categories, including computers, smartphones, and automatic data processors. It also included semiconductor equipment, memory chips and flat panel displays.
The exemption was a welcome relief for major technology companies, including Apple, which relies heavily on Chinese manufacturing. However, even if tariffs from April 2 have been abandoned for now, these electronic goods still face the 20% tariffs imposed by Trump by April 2.
Trump also said the exemption is temporary and new tariffs may soon arrive. Additionally, on Monday he published an investigation into the national security impact of importing semiconductors and chip manufacturing equipment, injecting new uncertainties into electronics companies.
It is generally difficult to move the supply chain. For electronic products, it is particularly difficult to replace them. Arranging industrial processes in different locations takes time and investment.
Bradley Saunders, North American analyst at Capital Economics, tells Al Jazeera that the technology merchandise assembly process has been built over the years.
For now, Apple has outsourced most of its assembly operations to China. There’s not just one smartphone company. Almost 90% of game consoles sold in the US by Sony, Microsoft and Nintendo ship from China.
Elsewhere, Nvidia relies heavily on components from China. The technology giant relies on Taiwanese semiconductor manufacturers to manufacture cutting-edge graphics cards and AI chips.
Apple and Nvidia have made extensive progress across the US stock market after Trump announced the recent exemption. According to Saunders, new tariffs could pose a “difficulty” to the US technology sector.
US Agricultural Exporters
Trump’s first trade war with China from 2018 to 2019 lost billions of dollars in revenue for American farmers. “The agricultural industry has always tended to lose in trade wars,” Sanders said.
He pointed out that “about 15%” of US farm exports were sent to China in 2024. In particular, the Soya Bean sector will be lost as China is the largest export market.
When Trump imposed tariffs on Chinese goods in his first presidential term, Beijing retaliated by buying soybeans from other countries like Brazil. They also imposed their own retaliatory tariffs. This time, these tariffs are five times higher.
The American Soybean Association has publicly opposed Trump’s tariffs on China, and soybean farmers have warned that many of the industry could go out of business if the trade war continues.
According to the Department of Agriculture Agricultural Census, there are over 500,000 soybean producers in the United States. This includes at least 223,000 full-time jobs supported by the Soya Bean industry, according to a 2023 report from the National Oilseed Processors Association and the United Soybean Board.
The industry is worth $124 billion in the US. It goes beyond the entire economy of Kenya and Bulgaria.
Corn and pig farmers are urging the Trump administration to retreat from tariff nausea. Cargill, Archer Daniel’s Midlands and Tyson Foods are three of the largest US food companies that are likely to lose export revenue from China.