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Investing.com-- Chinese technology stocks, including those that supply to Apple (NASDAQ:AAPL), rose sharply on Monday after President Donald Trump’s administration signaled that electronics were exempt from his steep reciprocal trade tariffs on Beijing.
While Trump did say that this was only temporary, and that he will separately tariff electronics imports, markets took some relief from the temporary exemption. Tech in particular was battered by an escalating U.S.-China trade war in recent weeks.
In China, Apple suppliers such as Luxshare Precision Industry Co Ltd (SZ:002475) and AAC Technologies (OTC:AACAY) Holdings Inc (HK:2018) rose between 1% and 3%, while electronic devices giant Lenovo Group (HK:0992) soared over 5%. The Hang Seng index also rallied nearly 3%.
Other Chinese tech stocks- such as chipmaker Semiconductor Manufacturing International Corp (HK:0981), and internet giants Alibaba (HK:9988), Baidu (HK:9888), and Tencent Holdings Ltd (HK:0700)- also rose sharply, recouping a measure of recent losses.
China’s electronics manufacturers are heavily exposed to U.S. exports, with China also playing a key role in the manufacturing supply chain of majors such as Apple.
Trump’s rapidly escalating trade war threatens to destabilize this trend, given that roughly 90% of Apple’s flagship iPhone is manufactured in China.
The increased tariffs could result in a broad-based hike in U.S. electronics prices, at a consumer and industrial scale.
Apple’s Asian suppliers outside China also mostly advanced. In Taiwan, Hon Hai Precision Industry Co Ltd (TW:2317), also known as Foxconn, jumped over 4%.
South Korea’s Samsung Electronics (KS:005930) added 1.5%, while in Japan, suppliers such as Sharp (OTC:SHCAY) Corp (TYO:6753) and Sony Corp (TYO:6758) rose 3.5% and 1.7%, respectively.