Apparently under pressure from Apple, Samsung, and others, President Trump issued additional exemptions for reciprocal punitive tariffs on Friday evening. The latest exemptions allow importing digital signage products such as displays, LEDs, monitors, and PCs once again without additional reciprocal tariffs.
This weekend brought a great relief to the digital signage industry. For the time being, the additional punitive tariffs of up to 145% on electronic products were suspended for 90 days. This means that displays, monitors, LEDs, and media players can now again be imported into the US with the base tariff rates of only 10% (from China with 20%). The extremely high punitive tariffs from China are thus off the table for the time being.
Punitive tariffs for the dvLED category, which is important in the digital signage industry, are not explicitly exempt from the punitive tariffs. However, for several years now, it has been common and accepted practice to use a certain amount of interpretation in the customs classification system to import dvLEDs into the USA at reduced tariffs.
Even if 10-20% tariff sounds like a huge relief compared to triple digit numbers, the now applicable tariff rate is already close to the 25-30% threshold, beyond which importing goods into the USA no longer makes business sense. A look at the auto industry shows that many manufacturers have stopped importing to the USA due to the current tariff rate of 25%.
According to US media, however, the suspension of punitive tariffs on electronics could only be a reprieve, as Trump has already announced that he will impose additional tariffs on certain sectors.
Background
On Friday evening, the US customs authorities announced the suspension of punitive tariffs on electronic products. Tobias Lang, CEO of Lang AG, has taken the time to decipher the individual categories. For fans, here is the link to decoding of individual tariff classes.
- Computers (HTSUS 8471) – Includes automatic data processing machines such as desktop PCs, laptops, and similar computers used for electronic data processing (for example, personal computers, servers, or laptops with CPUs, memory, etc.). This category is completely exempt from additional duties.
- Computer parts and accessories (HTSUS 8473.30) – Includes components of computers of heading 8471, e.g. hard disk drives, motherboards, graphics cards, and other accessories used in computers. These computer parts are also exempt from additional duties.
- Semiconductor production machines (HTSUS 8486) – Specialized machines for the production of semiconductors and flat-panel displays, such as equipment for producing silicon wafers, chip components, or LCD/OLED panels. Such manufacturing equipment (e.g. lithography or etching machines) is exempt from duties because it falls under the semiconductor definition.
- Mobile Phones / Smartphones (HTSUS 8517.13.00) – Telephone devices for cellular networks, especially smartphones, that combine wireless communication and computer functionality. These consumer electronics products (typically mobile phones) are exempt from the additional import duties.
- Network Equipment (HTSUS 8517.62.00) – Devices for data transmission in communication networks, such as routers, switches, or modems, that receive, convert, and forward voice, video, or data signals. Such communication devices (including Wi-Fi routers, etc.) are on the exemption list.
- Semiconductor Storage Devices (HTSUS 8523.51.00) – Non-volatile solid-state storage devices (e.g., SSD drives, flash memory cards, USB sticks) for digital data storage without moving parts. These electronic storage devices are exempt from the punitive tariffs.
- Flat panel display modules (HTSUS 8524) – Flat panel display modules, with or without touchscreens, that are installed in monitors, laptops, tablets, or televisions. These include, for example, LCD and OLED display units (without their own control electronics other than drivers). These display modules are exempt from customs duties.
- Computer monitors (HTSUS 8528.52.00) – Color display monitors that are directly connected to computer systems (item 8471) and intended for use by them. Typical examples are PC screens or similar displays without a TV receiver. These monitors are also exempt from additional duties.
- Diodes (HTSUS 8541.10.00) – Semiconductor diodes (without photosensitive function, not light-emitting diodes). These components conduct electrical current in only one direction (e.g., rectifier diodes) and are exempt from customs duties as part of the semiconductor exemption.
- Transistors <1 W (HTSUS 8541.21.00) – Low-power transistors (without photosensitive properties) with a power dissipation of less than 1 watt. These semiconductor switching elements used for amplification or switching in electronic devices are exempt from tariffs.
- Transistors ≥1 W (HTSUS 8541.29.00) – Power transistors (without photosensitive properties) with a power dissipation of 1 W or more. These larger transistors for higher currents/voltages are also exempt from additional tariffs.
- Thyristor/Triac Semiconductors (HTSUS 8541.30.00) – Thyristors and similar semiconductor switches (e.g., diacs, triacs) for controlling alternating current and power. These electronic switching elements are found in power control systems and are included in the exemption list.
- Special-purpose diodes (HTSUS 8541.49.10) – Other diodes (not classified as standard or light-emitting diodes). These may include, for example, photodiodes or infrared diodes that react to light. These special diodes are exempt from customs duties.
- Phototransistors (HTSUS 8541.49.70) – Transistors with a light-sensing function (photosensitive transistors). Components that change their conductivity under the influence of light (e.g., phototransistors) are exempt from additional duties.
- Other semiconductor devices (HTSUS 8541.49.80) – Other semiconductor devices with special functions that do not fall under any of the above subheadings. These include, for example, special optical or sensor semiconductor devices. This remaining category is also exempt from customs duties.
- Miscellaneous semiconductor equipment (HTSUS 8541.49.95) – Other semiconductor components, also not elsewhere classified. This item covers other semiconductor products and is part of the exemption list (e.g., specialty electronic components).
- Semiconductor transducers (HTSUS 8541.51.00) – Semiconductor-based transducers that convert physical quantities into electrical signals. These include sensors (pressure, motion, temperature sensors, etc.) based on semiconductor technology. They are exempt from the punitive tariffs.
- Other semiconductor devices (HTSUS 8541.59.00) – Other semiconductor components not falling under the above categories. This is a catch-all category for various Most semiconductor devices (excluding integrated circuits), which are also exempt from customs duties.
- Parts of semiconductor devices (HTSUS 8541.90.00) – Components and spare parts for the semiconductor devices mentioned above. These include, for example, wafers, semiconductor chips, packages, or other components used as parts of diodes, transistors, etc. These parts are also exempt from additional duties.
- Integrated circuits (HTSUS 8542) – Electronic integrated circuits (ICs or microchips) in which numerous electronic components are combined on a semiconductor substrate. These include processors, memory chips, microcontrollers, etc., which are considered “semiconductors” in the broader sense. All of these ICs are exempt from punitive tariffs.
