[Source/Observer Network, Xiong Chaoying] On April 2 local time, US President Trump threw out the "reciprocal tariff" measure, showing the "ferocious fangs" to global trade. On the same day, the White House website released a situation statement detailing Trump's "reciprocal tariff" policy.

It is worth noting that in one paragraph of this document, the US side wrote: "Some goods will be exempt from the 'reciprocal tariff'", totaling six major categories, including steel and aluminum products, automobiles and parts, copper products, pharmaceuticals, semiconductors and wood products, gold, and certain minerals and energy that cannot be obtained domestically in the United States.

Bloomberg believes that Trump's move means that these mentioned special goods will not be overlaid on top of the "reciprocal tariffs" announced against various countries, easing the pressure on domestic purchasers and indicating that his administration has taken a "cautious attitude" toward large commodities with high import dependency in the United States.

However, The Wall Street Journal expressed skepticism, pointing out that while this move appears to be "helping in times of need," it is actually "a drop in the bucket." For example, regarding semiconductors, which are included in the tariff exemption list, for the chip industry whose products have penetrated countless consumer goods, this "comfort" is negligible, whether or not it is exempted, the chip industry cannot escape the tariff.

"This 'indirect trade' makes it extremely difficult to assess the impact on the semiconductor industry, but one thing is certain - the blow will be devastating." The report bluntly stated that after many products containing chips experience price increases, demand may be affected, and more worryingly, given Trump's personality, he is unlikely to withdraw these destructive tariffs and is likely to impose even more tariffs in the future.

On April 2 local time, Trump signed the tariff executive order. Visual China.

The executive order signed by Trump, which deserves careful consideration

On April 2 local time, Trump signed an executive order to impose "reciprocal tariffs", and the White House website also released the full content of this executive order. In Section 3 (section 3) of the executive order, situations where "reciprocal tariffs" do not apply are clearly mentioned and listed.

In another detailed explanation of the "reciprocal tariff" issued by the White House on the same day, these tariff exemptions are also listed. Specifically, the White House includes six major categories in the tariff exemption list:

1. Items regulated by Section 1702(b) of Title 50 of the United States Code (Note from Observer Network: involving food, medicine, and humanitarian supplies);

2. Steel and aluminum products, cars and car parts already subject to Section 232 tariff provisions (Note: These goods were separately taxed earlier, and no "reciprocal tariffs" will be added this time);

3. Copper products, medicines, semiconductors and wood products;

4. All items that may be included under Section 232 tariff provisions in the future;

5. Precious metals such as gold and silver (bullion);

6. Energy and other specific mineral products that cannot be obtained domestically in the United States.

In addition, Section 3(f) of the executive order signed by Trump mentions that if at least 20% of the value of a product originates from the United States, the tariff will only be levied on the "non-US origin portion" of the product.

Moreover, the White House also released two attachments, listing the specific tariff codes and conditions for exempted goods, totaling nearly 1,000 items.

White House officials sent signals: Tariffs are not over yet

Bloomberg pointed out that by exempting key metals from tariffs, the Trump administration reduced the possibility of price chaos recurring in the global copper market recently. However, it did not eliminate the uncertainty about the future direction of commodity policies.

The report cited a senior White House official who said that these key minerals with special strategic value may become the objects of tariff investigations initiated by Trump under Section 232 of the Trade Expansion Act.

Previously, based on Section 232, the Trump administration imposed a 25% tariff on all steel and aluminum imported into the United States. In response, China's Ministry of Commerce spokesperson He Yongqian responded on March 13, stating that China consistently believed that the US Section 232 measures were unilateralism and protectionism under the guise of "national security." China, along with many other countries, strongly opposed these measures and urged the US to cancel the steel and aluminum Section 232 measures as soon as possible.

He Yongqian stated that both the Section 301 tariffs and the Section 232 tariffs have been ruled by the WTO Dispute Settlement Body as violations of multilateral trade rules. The叠加 of these tariffs neither helps所谓的 "national security" nor rescues the domestic industry in the US; they merely highlight the unilateralism, protectionism, and bullying nature of US measures.

Bloomberg noted that the US is highly dependent on imports for many metal resources, while China controls the dominant position in these resource supply chains. Trump has made it clear that he intends to enhance the US ability to obtain critical minerals (especially rare earths), but any tariff measures must balance the risk of potentially stifling the supply of raw materials for domestic manufacturers.

In U.S. weapons systems using gallium, germanium, and antimony, 87% of the supply chain relies on Chinese suppliers, according to a chart created by the American Geovini Company.

For example, according to data from the U.S. Geological Survey, the US depends on imports for 80% of its rare earths, nearly three-quarters of its zinc and tin, and more than half of its lithium resources. In contrast, its dependence on steel imports is relatively low - making the resistance to imposing tariffs on steel imports relatively small.

Tariffs helped push up steel prices, causing stocks of US steel manufacturers to generally rise this year, outperforming the overall market. However, these measures come at a cost, as weak steel demand persists due to sluggish construction markets, high inflation, and high borrowing costs.

Under the tariff stick, the semiconductor industry finds little hope

The Wall Street Journal pointed out that although the White House announced tariff exemptions for semiconductors, such exemptions are unlikely to last long. On April 3 local time, Trump hinted aboard Air Force One that "actions targeting chips are coming soon."

The report noted that so far, direct semiconductor imports totaled approximately $82 billion last year, which were indeed tax-free, but the vast majority of chips entered the country indirectly.

These chips are usually manufactured and packaged overseas before being installed in electronics sold globally (including in the US). These products face up to 49% tariffs, and many so-called "US-made" chips also need to be shipped to mainland China, Taiwan, or Southeast Asia for final assembly before being re-exported to end customers.

According to analysis by Bernstein Research, last year the US imported approximately $521 billion worth of machinery, $478 billion worth of electronics, and $386 billion worth of vehicles, all of which often contain many chips. If people reduce purchases due to price increases, chip sales will inevitably decline. Ultimately, this will lead to a decrease in revenue and growth rates for chip manufacturers, potentially affecting profits and stock valuations.

Stacy Rasgon, an analyst at Bernstein Research, bluntly stated in a research report: "Overall, we see little upside for the semiconductor sector (to be honest, other industries as well)."

On April 3 local time, the day after Trump announced "reciprocal tariffs," the stock prices of major chip companies plummeted collectively. The Philadelphia Semiconductor Index fell by about 7.5% during trading, and some major clients also suffered - Apple fell more than 8%, and Dell's decline exceeded 15%.

The Wall Street Journal admitted that Trump's tariff policies have done nothing to incentivize chip manufacturers to increase production in the US. Since chips always have to go through Asian supply chains before returning to the US as taxed goods, there is little hope for this industry.

"The best-case scenario is that the Trump administration makes concessions and withdraws most of the destructive tariffs, then the plunge could become a buying opportunity." But the report seems to hold little optimism, believing that given Trump's usual "escalating" and "not seeing the coffin before crying" style, the opposite scenario - imposing more tariffs - is more likely to happen in the future.

This article is an exclusive contribution from the Observer Network and cannot be reproduced without permission.

Original source: https://www.toutiao.com/article/7490596307657130548/

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