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Saturday, September 08, 2018
U.S. tariffs on China Will Hit Apple Watch, Other Apple products


A "wide range" of Apple products including the Apple Watch would be affected by proposed U.S. tariffs on Chinese goods, the company told U.S. trade officials.

Apple did not disclose specific revenues for most of the affected products, but of those the Apple Watch may be the biggest seller.

Apple laid out the impact on its products of the Trump administration's proposed tariffs on $200 billion worth of Chinese goods in an unsigned letter it submitted on Wednesday to U.S. officials as part of a public comment period.

On Friday, U.S. President Donald Trump, speaking aboard Air Force One, said that he has tariffs on an additional $267 billion in Chinese goods "ready to go on short notice if I want."

Cell phones, the biggest U.S. import from China, have so far been spared, but would be hit if Trump activates the new $267 billion tariff list.

AirPods headphones, some of Apple's Beats headphones and its new HomePod smart speaker also face levies as part of the proposed tariffs on $200 billion worth of Chinese goods, according to the letter submitted on Wednesday.

The letter did not mention the iPhone, which accounted for about two-thirds of Apple's $229 billion in revenue in its most recent fiscal year. The letter also made no mention of the iPad.

Apple did say its MacMini, a low-priced computer that comes without a keyboard or mouse, would be affected.

Many Apple accessories, such as mice, keyboards, chargers and even leather covers for iPhones and iPads would face tariffs, Apple said.

Apple also said that computer parts for its U.S. operations would be hit by the tariffs. The company said that "main logic boards with microprocessing units" could face levies, along with equipment used for research and development.

U.S. President Trump tweeted on Saturday that Apple should make products inside the United States if it wants to avoid tariffs on Chinese imports.

"Apple prices may increase because of the massive Tariffs we may be imposing on China - but there is an easy solution where there would be ZERO tax, and indeed a tax incentive. Make your products in the United States instead of China. Start building new plants now," Trump tweeted.

Intel, the world's second-largest chipmaker, weighed in supporting Apple's opposition to the tariffs and broadening the argument. Computer and phone makers are involved in a global supply chain that includes Chinese manufacturing, and that can't be easily excluded without harm to U.S. companies, Intel said in a letter to the trade representative. The U.S.'s ability to continue to dominate telecommunications technology, including the upcoming fifth-generation phone networks, will be hampered by the levy on imports from China.

In addition, the chip industry is a source of trade surplus for the U.S., including with China, Intel argued.



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