Al Root
The Trump administration is excluding smartphones and other select imports from its draconian tariff policies -- which will help Tesla.
Friday, the U.S. Customs and Border Protection published a list of eight- or 10-digit numbers used to classify goods, known as HS codes, for "Reciprocal Tariff Exclusion for Specified Products."
(HS is short for Harmonized System, "an international index used for categorizing goods, enabling consistent classification and taxation," according to shipper UPS.)
The codes CBP listed include many semiconductor-related parts, among them smartphones. Flat-screen displays and integrated circuits are also on the list of items exempted from tariffs.
That helps Tesla -- whose electric vehicles all have flat touchscreen displays and come with advanced onboard computers.
Many flat-screen displays are manufactured in Asia, which Trump has targeted through tariffs. Taiwan Semiconductor and Samsung, who have manufactured chips for Tesla previously, have manufacturing capacity in China, Taiwan, South Korea, and other countries.
Tesla didn't immediately respond to Barron's request for comment about the exclusions.
Goods imported from South Korea are subject to a 10% tariff rate, which could rise to 25% after the 90-day pause President Donald Trump announced on Wednesday expires. Similarly, Taiwan's current 10% rate could jump to 32% at the end of the period.
Chinese imports, meanwhile, currently face a 125% tariff.
About 25% of the parts from the average Tesla sold in the U.S. come from Mexico, according to data from the National Highway Traffic Safety Administration. Another 10% come from somewhere overseas. The remaining 65% of a Tesla comes from Canada and the U.S. (The government data doesn't distinguish between the two countries.)
Barron's previously estimated that U.S. import tariffs on parts could raise the average cost for Teslas assembled in America by about $4,000 per vehicle. That was only a rough rule of thumb.
Investors should get more details about tariffs and costs when the company reports first-quarter numbers on April 22.
More exclusions could be on the way. "We saw this the first time around, " says Yahoo Finance's Rick Newman. "There were more than 100,000 exemption requests in 2018 and 2019."
Through Friday trading, Tesla stock was down 11% since April 2, when Trump announced sweeping global tariffs as part of his so-called "Liberation Day." The S&P 500 was off 5%.
Write to Al Root at allen.root@dowjones.com
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April 12, 2025 13:01 ET (17:01 GMT)
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