Apple avoided feared tariffs on popular items such as its smart watch, wireless earphones and Mac Mini computer after the U.S. opted to exclude those products from its list of $200 billion in new levies on Chinese imports.

The most valuable company in the U.S., which manufactures most of its popular gadgets in China, including its hot-selling iPhone, has massive exposure to the world's second-biggest economy and has been in the crosshairs of the trade dispute between Washington and Beijing.

The exemption from the tariffs, which the U.S. says will start at 10 percent when they go into effect Sept. 24 and rise to 25 percent Jan. 1, was greeted positively by Wall Street, which feared Apple might raise prices on products if they were subject to them.

The Apple Watch, AirPods and Mac Mini, its compact personal computer, were all exempted from the tariffs, although accessories such as adapters, chargers and leather covers and cases for its products were not. The iPhone has not yet been targeted by the tariffs.

"It's definitely a good thing," says Angelo Zino, senior equity analyst at CFRA, a Wall Street research firm, noting roughly 5 to 7 percent of Apple's revenue base was vulnerable to potential tariffs.

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"The removal of the Apple Watch as well as AirPods from the final list of products alleviates any potential negative impact to Apple's business," Zino says, adding the lower 10 percent levy on accessories and leather covers likely means the company will not pass along any of its added costs to consumers.

Apple stock rose 1 percent to $220.13 per share in morning trading, pushing its market value to an estimated $1.06 trillion. Last month, Apple became the first U.S. publicly traded company to achieve a market capitalization of $1 trillion. Tariffs on China imports to the U.S. "represent the single biggest risk" to the tech company's stock, says Tom Forte, an analyst at D.A. Davidson.

Despite the exemptions for key segments of the tech industry, the Trump administration's decision to slap China with another $200 billion in tariffs represents a "material escalation of trade tensions with China," notes Lewis Alexander, chief U.S. economist at Nomura.

And that means a worsening of the trade dispute could still harm U.S. interests. The tech industry is a key driver of the U.S. economy. It also has an outsized 26 percent weighting in the Standard & Poor's 500 stock index, one of the broadest measures of the U.S. stock market.

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Last week, Apple unveiled a new range of products, ranging from newer versions of its iPhone and Watch.

Earlier this month, Apple sent a letter to the U.S. Trade Representative urging not to apply tariffs to a wide range of its products, warning the import taxes "will result in lower U.S. growth and competitiveness and higher prices for U.S. consumers."

Many economists and investment professionals fear China will retaliate against U.S. companies that do business in China and assemble products there.

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"I would hesitate to say that any company with international exposure that currently enjoys a tariff exemption from China is out of the woods," says Mike Loewengart, vice president of investment strategy at E-Trade. "Really we're just at the beginning."

China, he notes, has vowed to do what is necessary to protect its own interests, and President Donald Trump has threatened to levy additional tariffs on the world's second-biggest economy.

But CFRA's Zino downplayed the risks to Apple's business despite potential retaliation from China, noting that the company has a "very good standing" with the Chinese government and creates a lot of jobs in the local Chinese market.

"While no company is immune to potential tariffs in the future," Zino says, "we continue to believe that iPhones are best positioned to avoid being hit with tariffs by the Trump administration given the importance that product line has on the U.S. consumer."