Planning on buying an iPhone any time soon? Good luck guessing how much it will cost or the best time to get it.
Consumers and Apple investors were set to celebrate on Friday after a notice from U.S. Customs Border Protection said smartphones and other electronics were exempt from tariffs on China with the exception of the 20% duty related to the fentanyl crisis. But the joy might prove short-lived after
President Donald Trump said in a social-media post Sunday that electronics could be hit with levies alongside semiconductors.
It seems the vision of a “made in USA” iPhone—which one analyst estimated could cost
$3,500—is dead for now. Fears of a sticker shock to consumers are outweighing the dream of bringing such manufacturing stateside.
The reasons for concern are evident on Wall Street. Bridgewater Associates founder Ray Dalio said Sunday that the U.S. is “very close” to a recession due to the trade war, joining a chorus of bank CEOs who sounded the alarm last week. There will be more clues to sentiment this week, as Goldman Sachs reports earnings Monday, followed Tuesday by Bank of America, Citigroup, and, in the consumer space, Johnson &
Johnson, and then Netflix Thursday.
U.S. retail sales and industrial production data for March on Wednesday will also be watched closely, alongside comments on the same day from Federal Reserve Chair Jerome
Powell. However, any rise in consumer spending could be misleading as consumers are expected to rush to make purchases ahead of the imposition of tariffs—an example of how difficult it is to read the economic tea leaves amid rapid changes in policy. The best time to buy an iPhone might turn out to have been last month.
—Adam Clark
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economics writer Megan Leonhardt today at noon when she talks with Beth Ann Bovino, chief economist at U.S. Bank, about current economic conditions, the impact of shifting federal policies, the outlook for Federal Reserve rate policy, and recession risks. Sign up here.
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President Says No ‘Exception’ On Levies. Chip Duties Loom.
President Donald Trump said that there are no exceptions to tariffs and
no escape from them, adding to the confusion over conflicting information whether carve-outs announced Friday were temporary for smartphones, PCs, and other personal tech devices imported from China.
- “NOBODY is getting ‘off the hook,’” Trump wrote in a social media post on Sunday. “There was no Tariff ‘exception’ announced on Friday,” he said. Tech products imported from China are still subject to existing 20% levies imposed as part of Trump’s fentanyl emergency, he said.
- Customs and Border Protection late Friday issued updated guidance in a document titled “Reciprocal Tariff Exclusion for Specified Products,” listing smartphones, PCs, chips, and other tech products. That update was largely celebrated on Wall Street as an important exception in Trump’s escalating trade war with China.
- But administration officials dialed that back. Commerce Secretary Howard Lutnick told ABC that tech exemptions are temporary and chip sector tariffs are coming. U.S. Trade Representative Jamieson Greer told CBS tech imports had simply moved to a different category of potential tariffs to be handled separately from Trump’s reciprocal tariffs.
- A CBS News/YouGov poll found 74% of Americans see Trump’s tariffs as benefiting the wealthy, and 71% see them helping large corporations, while only 32% said small businesses. Fifty-three percent of respondents think the economy is getting worse.
What’s Next: Wedbush tech bull Dan Ives wrote Sunday that the back and forth on the tech exemptions was just another example of the “mass uncertainty, chaos, and confusion,” adding that it is “dizzying” and creating unwelcome chaos for companies trying to plan their supply chain, inventory, and demand.
—Liz Moyer and Janet H. Cho
Bank CEOs Leave Outlooks Unchanged Even as Clouds Gather
Wall Street CEOs are sounding cautious-to-downbeat about the economy even though their companies left their outlooks largely unchanged. That may mean revisions are in store for later in 2025, especially once the Trump
administration lifts its 90-day delay on tariffs for imports from most countries.
- The economic backdrop is so fast-moving that JPMorgan CEO
Jamie Dimon rang up the bank’s chief economist Michael Feroli before the bank’s earnings conference call on Friday. Dimon relayed the message to analysts: “They think it’s about 50-50 for a recession.”
- JPMorgan raised its provision for credit losses to $3.3 billion in the first quarter from $2.6 billion in the fourth quarter, what analysts saw as a sign of prudence in the face of uncertainty. Morgan Stanley’s total provision for credit losses rose to $135 million in the first quarter from $115 million in the fourth quarter.
- Still, the finance executives’ verbal cues on earnings calls and recent comments showed the tariff-created uncertainty is weighing on them and their customers. Wells Fargo CEO Charlie Scharf said that he expects “continued volatility and uncertainty.”
- Morgan Stanley CEO Ted Pick, meanwhile, acknowledged on an earnings call that some clients were postponing deal-making amid the uncertainty. Economists have revised forecasts in anticipation of slower economic growth and higher inflation, with some saying a recession is in the cards.
What’s Next: Billionaire hedge fund founder Ray Dalio told NBC News on Sunday that the trade war could push the economy to the brink. The tariff rollout has been “very disruptive,” adding, “I think that right now we are at a decision-making point and very close to a recession.”
—Rebecca Ungarino and Andrew Welsch
Investors Worried About Trade Are Eyeing Forecasts Over Earnings
Companies are entering earnings season amid turbulent markets and an
escalating trade war. This week includes more bank results, but notably some early tech reports, including ASML Holding, Netflix, and Taiwan Semiconductor Manufacturing. Investors will again focus more on year-ahead forecasts and what management says than on the numbers.
- BlackRock CEO Larry Fink told CNBC on Friday that the market is underestimating how high inflation could spike, and the U.S. needs a trade deal with
China. The “power of U.S. capitalism” is still alive, he said, but the U.S. is acting as a destabilizing force in the
