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Global Stocks Surge as Trump Pauses Tech Tariffs on Smartphones and Semiconductors

Global Stocks Surge as Trump Pauses Tech Tariffs on Smartphones and Semiconductors

By: Sayan

Published on: Apr 14, 2025



On Monday, April 14, 2025, global stock markets experienced a significant rally, driven by President Donald Trump’s unexpected decision to temporarily exempt smartphones, computers, and semiconductors from his "reciprocal" tariffs. This move has sparked optimism among investors, particularly in the tech sector, as it alleviates immediate pressure on consumer electronics prices and supply chains heavily reliant on Chinese manufacturing. The announcement marks a pivotal moment in Trump’s ongoing trade policies, which have kept markets on edge since their introduction.


The reprieve for tech imports has had an immediate impact on major indices worldwide. In the U.S., futures for the Dow Jones Industrial Average and S&P 500 climbed approximately 1%, while Nasdaq futures surged 1.3%, signaling strong confidence in tech-heavy portfolios. Among the so-called Magnificent Seven stocks, Apple Inc. (AAPL) stood out, with its shares leaping 5% in premarket trading, building on gains from the previous Friday. This exemption is particularly significant for companies like Apple and Nvidia, which depend on intricate global supply chains, with much of their production based in China. By sparing smartphones, laptops, and semiconductors from the 125% tariffs imposed on Chinese goods, the administration has provided a lifeline to tech giants and consumers alike, averting potential price hikes that could have dampened demand.


Globally, the positive sentiment was equally pronounced. In Europe, the Stoxx Europe 600 index rose 2%, reflecting relief among investors wary of escalating trade tensions. In Asia, Japan’s Nikkei 225 closed 1.2% higher, while Hong Kong’s Hang Seng index soared 2.4%, buoyed by the prospect of stabilized tech exports from China. These gains underscore the interconnected nature of global markets, where policy shifts in one country can ripple across continents, influencing investor confidence and economic outlooks.


China, a focal point of Trump’s tariff strategy, responded cautiously to the exemption. The state-owned Xinhua News Agency described the move as “a small step” toward correcting the U.S.’s “wrong practice of unilateral ‘reciprocal tariffs.’” While the pause offers temporary relief, it does not extend to other Chinese imports, which continue to face steep duties, including a 20% tariff tied to the fentanyl trade. Moreover, Trump has signaled that semiconductors may face separate tariffs in the near future, following a national security trade investigation, keeping uncertainty alive for chipmakers like Taiwan Semiconductor Manufacturing Company (TSMC).


Despite the stock market’s enthusiastic response, underlying concerns persist. The yield on 10-year U.S. Treasury notes, which had surged recently, pulled back slightly to 4.44%, indicating a cautious recalibration among bond investors. Analysts at MUFG noted that uncertainty over China’s appetite for U.S. Treasury bonds is contributing to waning confidence in dollar-based assets. The U.S. dollar itself weakened against major currencies on Monday, reflecting broader anxieties about the long-term implications of Trump’s trade policies. Investors remain wary, as the tariff pause is temporary, and Trump’s administration has hinted at flexibility rather than a full reversal, suggesting more volatility ahead.


The market’s reaction also highlights the delicate balance between trade policy and economic stability. While the exemption has forestalled immediate disruptions in the tech sector, economists warn that prolonged uncertainty could erode consumer confidence and corporate investment. For now, the pause has provided a much-needed breather, allowing companies to reassess supply chain strategies without the immediate threat of crippling tariffs. However, with Trump emphasizing that the exemptions are not permanent, businesses and investors are bracing for potential shifts in policy that could reignite trade tensions.


As markets digest this development, the focus is shifting to how companies like Apple, Nvidia, and TSMC will leverage this window to strengthen domestic manufacturing, a key goal of Trump’s trade agenda. The White House has reiterated its push for onshoring critical technologies, with Press Secretary Karoline Leavitt stating that major tech firms are “hustling” to bring production to the U.S. Whether this pause translates into lasting stability or merely delays the inevitable remains to be seen, but for now, global stocks are riding a wave of cautious optimism, fueled by a rare moment of reprieve in an otherwise turbulent trade landscape.


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