US Customs has announced exemptions from the 145% tariffs imposed by Trump on certain Chinese tech products, benefiting smartphones and computers. These exemptions, revealed late Friday, also include semiconductors, solar cells, flat panel TV displays, flash drives, and memory cards.
While the future of tariffs on these items remains uncertain, any potential rates are anticipated to be lower than 145%. This decision is expected to positively impact tech companies, with Apple being one of the primary beneficiaries, as most of its production occurs in China.
Initial Announcement Details
What the initial announcement conveys is a late-week move from US Customs that lifts some of the recently reinstated tariffs — up to 145% — on selected Chinese tech imports. The detailed list takes in both consumer electronics such as smartphones and computers, as well as inputs including flash storage, chips, and display panels. While the changes were made public after market hours on Friday, meaning immediate pricing adjustments in derivatives were not initially visible, futures and options linked to companies in the sector are likely to reflect this development quickly as the new week begins.
The move offers a relief valve for tech firms with Chinese production pipelines, a group that strongly includes Apple. The firm has long relied on precision manufacturing across eastern Asia, and for them and others in similar positions, any easing of trade strain with the US materially alters margin projections moving into the next quarter.
From our perspective, what matters now is the tone this sets for forward policy. While the complete removal of duties hasn’t occurred, the scale of exemption and the variety of goods covered set a precedent; tariffs, if they return in full, may not apply with the same bluntness. That’s not yet policy, but it does imply some scope for planning ahead based on this reduction alone.
Market Implications
For those active in derivatives tied to tech equities or hardware indices, we must shift focus toward pricing implied volatility across the sector. The weekend announcement won’t affect longer-dated contracts immediately, but it resets part of the base assumptions underpinning risk models. While options for the affected firms may now begin to display lower premium levels due to eased cost concerns, this adjustment won’t uniformly apply across the board. Some firms won’t benefit as much, and the divergence between names might widen.
Volatility, in the near term, could still be driven off policy commentary or retaliatory measures, particularly if Beijing responds unevenly, but for now, we should expect call spreads within consumer electronics manufacturers to tighten ever so slightly. Hedging behaviour may moderate as import cost pressure softens.
What we’d advise is fine-tuning delta exposure through rolling strike repositioning in fitted options rather than abandoning hedges altogether. The exemptions are product-specific, not industrially wide, and that changes the way dispersion works inside the sector baskets. Given the strong US emphasis on hardware and the delicate nature of US-China policy communications, surprises can re-enter with little warning.
Furthermore, tracking the US dollar in response to these shifts will also be important. Should investor sentiment brighten over lowered input costs and better access to supply, the broader indices may react with renewed appetite for tech growth stories. That would, in turn, spill into the relative strength of tech versus energy or industrials. Should this shift gather momentum, correlation matrices between equity baskets may require updating sooner than planned.
In the meantime, we’re rebalancing vol curves particularly on semiconductors and storage devices, as those were explicitly listed. Memory manufacturers with high mainland sourcing might show tighter forward earnings spreads, especially with capital markets now pricing in tariff relief at scale. The rare specificity of Customs’ decision doesn’t just lower costs — it clarifies which product lines Washington is unwilling to disrupt further. That specificity matters. So we’ll change how we approach earnings straddles for early-cycle suppliers, adjusting for potentially narrower realised volatility.
Finally, adjust watchlists to focus on sentiment movers — particular statements from trade authorities or executives responding to the exemptions could trigger mini-breakouts or pullbacks, especially on speculative names with thin floats.
