Now, the United States has decided to spare some electronic products like smartphones, laptops, and computer chips from the tariffs announced by President Donald Trump. Now, the new list of exempted goods was published late on Friday, and it includes many tech products manufactured in China. It offers relief to American companies like Apple, Nvidia, and Dell, who faced crippling tariffs after the trade war between the US and China ramped up this week. Now, the volatility caused by the tit for tat retaliations upended global markets and now US President Donald Trump is pushing for a deal with China. The European Commission says it’s open to negotiating with Washington, but it is also pushing for internal market reforms. We can get some expertise here from Robert Galott, an associate professor in the department of political science at the University of Chicago, who researches the relationship between governments and global markets. So uh first your thoughts here. The US administration now granting tariff exclusions for smartphones, computers, other electronic imports supplied largely by China. What do you think is behind this move? Well, these products directly face consumers and so in some sense it’s a way of making any trade war that uh US continues with China more credible. One of the things that happened in this week is basically we’ve hit the pain point for the US leadership where they couldn’t continue along the path of the high tariffs on the entire world and in fact the 140 something% tariff on China was also unsustainable for the US economy in the short run and it continues to be unsustainable but in this case ex by exempting these particular products very powerful companies won’t be directly harmed by uh the tariff at least at least these particular companies Dell, Apple, IBM that make up a big share of the US stock market and we’re beginning to show the produce fractures in the rest of the economy. So, they’ll be happy to hear this news, I’m sure. Do you think it’s also in some ways an acknowledgement um that that it will be very difficult to bring electronic supply chains back to the United States? Absolutely. This is going to be uh if it were to work, it would have taken years of uh painful adjustment. I think this is a concession that these negotiations are really just to change the terms of the negoti of trade between the two countries, the US and China, and not fundamentally to rework the supply chain of these major corporations. Whether or not that’s what the people within the Trump administration would really want, I think they’re facing the reality that the pain that would be necessary to achieve that would be too great for the US economy. Yeah. Do you think that is the calculus here? Is this is this an offramp um from not seeing a more punishing trade war with China? I don’t necessarily see this as an off-ramp as it was a unilateral concession by the United States. And in order to really have an off-ramp, it will require uh reciprocal negotiations with China as China has already retaliated against the United States and it’s not clear that they’re conditioning their tariff policy on these changes. Instead, we could just see this as in fact the opposite. Unfortunately, this might make it more possible for Trump to maintain the kind of aggressive stance against China on all of the other products that are still have that 145% tariff. It just removes one loud voice from the US anti-p protectionist coalition. You could think of it perhaps as divide and rule strategy visav the US milit uh the US uh industry US business uh environment where now a very powerful set of actors have less of a reason to raise a stink about these tariffs and I I do worry that this is just one way to try to make the tariffs a little less painful and allow them to continue uh them for longer periods of time. So this is not a sign to me of success of the tariff negotiations, nor do I see it as a backing down necessarily from the the general strategy of trying to disrupt global markets, but rather a way to make that little less immediately painful for the uh for the US. Well, thank you so much for joining us today with your insights. We’ve been speaking with Professor Robert Guli. You’re welcome. Now, the looming US tariffs aren’t just rattling multinational corporations. Some small businesses in Germany are feeling the heat, too. That includes the toy and woodwork shops in the ore mountains, known around the world for their handcrafted nutcrackers. Donald Trump at his desk in the Oval Office as a nutcracker doll. The idea from the German company Steinback folks Kunst has been a huge hit in the United States. The doll costs $379, but that price could soon climb sharply due to the tariffs imposed by the real life US president. That’s a big problem here. More than 95% of production is sold in the US. The 20% tariff hike means the price tag will be above $400. And some customers might think that’s too much. 370 is already a lot and then adding 20% more. Whether we lose customers, that’s the big question. In the toy making village of Zipen in the ore mountains, wooden figures, toys, Christmas pyramids, and the world famous candle arches known as Shriburgen are sold on every corner. More than 120 small and large manufacturers operate in this region. Here there’s even a school for wooden toy makers where around 50 apprentices are currently learning the craft. Frederick Ga is a toy maker himself and the head of the association of artisans here. The US market is the most important for the manufacturers. We’ve had several dealers in the US who tried to get a 20% discount guaranteed by our manufacturers. That obviously doesn’t work. In the end, what will happen is that everything will be exported. The 20% extra tariff will be added. And then at Christmas time, we’ll see whether the prices still work in that market or not. The head of Steinbach Folks Const is in Seattle meeting customers at a trade fair. He says the impact of tariffs on EU imports is not yet fully understood by customers and dealers in the US. In the worstc case scenario, speaking for the entire industry, it could mean job cuts. That would be the worst case. If you no longer sell what you produce, you have to cut costs. And the major cost in our industry is, of course, labor. All of Rico Powell’s nutcrackers are handmade. If the tariffs take effect, he may be forced to let go of some of his staff. However, the 35 employees don’t want to let the debate over tariffs drive them crazy. They see Donald Trump’s recently announced 90-day delay as a positive sign.