Trump's Tariff Backtrack: Tech Giants Set to Surge—Is It Time to Buy?

Trump Shows Signs of Compromise—Tech Gets a Break

On Friday evening, the Trump administration delivered a welcome surprise for the tech industry: a new list of tariff exemptions covering key electronics like smartphones, computers, and semiconductors. The U.S. Customs and Border Protection agency rolled out the exclusions—effective retroactively from April 5 at 12:01 a.m. EDT—covering 20 product categories. This includes the 8471 code, which encompasses computers, laptops, and data processing equipment, as well as semiconductor devices, memory chips, and flat-panel displays.

The decision offers a lifeline to tech giants like Apple $Apple(AAPL)$   and Dell Technologies $Dell Technologies Inc.(DELL)$   , shielding them from Trump's 10% "baseline" tariffs on imports from most countries (excluding China). It also softens the blow on Chinese imports by exempting these products from the newly imposed 125% reciprocal tariffs—though the existing 20% tariffs tied to the U.S. fentanyl crisis still apply. For Apple, this is a big win: Evercore ISI estimates that 80% of iPads and over half of Mac computers are manufactured in China, a burden CEO Tim Cook is likely glad to dodge for now.

Speaking to reporters on Saturday, Trump remained cryptic, saying, "We'll get into details on Monday… we’re pulling in a ton of cash for the country." Meanwhile, Commerce Secretary Howard Lutnick added a twist on ABC's This Week Sunday, hinting that separate tariffs on smartphones, computers, and other electronics—alongside semiconductors—could still hit within a month. So, is this a genuine peace offering to tech, or just a brief timeout in Trump's trade war?

China's Response: A Small Step, But Not Enough

China’s Ministry of Commerce called the U.S. exemptions a "second adjustment"following the April 10 pause on steep tariffs for some trade partners, labeling it a "small step" toward correcting America's "misguided" tariff policy. “There's no winner in a trade war, and protectionism leads nowhere,” the ministry stated, invoking a Chinese proverb: “The one who tied the bell must untie it.” China urged the U.S. to take a "big step" by scrapping reciprocal tariffs entirely and returning to dialogue based on mutual respect.

But China's not backing down. On April 10, the U.S. hiked tariffs on Chinese goods to 125%, prompting China to warn that if the U.S. keeps piling on, Beijing will "ignore" further measures, claiming U.S. exports to China are already priced out of the market. The gloves are off—will this standoff escalate further?

Stock Market Rollercoaster: How We Got Here

Trump's tariff saga sent stocks on a wild ride. On March 28, he signaled openness to tariff deals but warned nothing would happen before his April 2 measures took effect. Markets freaked out—tariff fears sent the S&P 500 $S&P 500 Index (.SPX.US)$spiraling, with a peak drawdown of 15% from March 28 to early April. The "Magnificent 7" tech giants got hammered: Nvidia $NVIDIA (NVDA.US)$ led with a 22.27% drop, Apple $Apple (AAPL.US)$ and Tesla $Tesla (TSLA.US)$ each fell over 20%, while Microsoft $Microsoft (MSFT.US)$ held up better with a 12% decline.

Then came the April 9 bombshell: the White House paused tariffs on most trade partners (except China), sparking a ferocious rally. The S&P 500 $S&P 500 Index (.SPX.US)$ soared 9.5%, and the Nasdaq $Nasdaq Composite Index (.IXIC.US)$ jumped 12%. UBS now says the worst of the tariff shock might be behind us, with Trump softening his stance and market volatility easing. If markets fully unwind the tariff pessimism priced in since March 28, stocks could climb back to March 27 levels. Based on April 11 closing prices, Apple alone could see a potential upside of over 12%—a tantalizing opportunity for traders.

What's Next: A Bounce, But Don't Get Too Cozy

Don't pop the champagne yet. UBS warns this rally might be a short-term blip—tariffs still pose a serious economic threat, and markets haven't fully priced in the damage. Even with exemptions, U.S. growth faces downward pressure. Analysts previously pegged 2025 S&P 500 earnings growth at 11.2%, but factoring in tariffs, that could shrink to -5%. At a forward P/E of 23.7, valuations look stretched for a potential slowdown. UBS’s advice? Sell into this rebound—while tail risks have eased, the growth hit remains real.

History offers a reality check: of the 16 times the S&P 500 fell 15% or more in a year, it rebounded to positive annual returns just three times (18.75% odds):

· 1982: Fed rate cuts fueled a 15% yearly gain.

· 2009: Post-crisis QE drove a 24% surge.

· 2020: Pandemic-era QE and stimulus sparked a 16% rise.

Each recovery hinged on massive Fed or government intervention—something we're not seeing now.

Earnings season is kicking off, but Trump's unpredictability could throw a wrench in the works. Wedbush analysts warn: "We wouldn't be shocked if many companies skip guidance for Q1 earnings." With uncertainty looming, traders should buckle up for volatility.

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