US & China said nearing end of trade war impacting Apple's bottom line

Posted:
in General Discussion edited March 2019
The Trump administration is reportedly nearing a deal that could halt the trade war hurting the U.S. and China, and by extension Apple's iPhone business.

Tim Cook visiting the Apple Store in Beijing
Tim Cook visiting the Apple Store in Beijing


China would be required to make large purchases of U.S. energy and agricultural products over several years, and drop some barriers preventing American companies from operating in the country, New York Times sources said. In exchange the U.S. would have to remove tariffs on at least $200 billion of $250 billion in Chinese imports.

The Chinese government is said to be aiming for the removal of all Trump-era tariffs. With or without that however, one U.S. goal has been an enforcement tool that would revive tariffs if China backtracked on a deal.

One source argued that the U.S. language on foreign companies is currently too vague to be enforced, and that Chinese promises about reducing subsidies are too broad. The person noted that China is also leaving its data laws unchanged, which for instance required Apple to transfer some iCloud servers over to a local company, Guizhou-Cloud Big Data Industry.

There's also no sign that the country will relax rules forcing multinationals to transfer intellectual property to local partners. Publicly, at least, the U.S. has maintained that as a key position.

Apple hasn't suffered directly from tariffs. The Trump-initiated trade war has damaged both the American and Chinese economies however, likely impacting the ability of people to afford Apple products.

The company's Chinese revenues fell 26.7 percent in the December quarter, mostly because of weak iPhone sales. The reason for the drag is believed to be a mix of high prices and cheaper competition from local brands like Huawei and Xiaomi. Apple has taken multiple steps to revive interest, with modest impact so far.

Comments

  • Reply 1 of 6
    seanismorrisseanismorris Posts: 1,624member
    The Trump administration seems to be looking for a “win” rather than addressing the main problem, which is intellectual property theft.  It’s not mentioned here, but if there is nothing new in that regard China won this round.

    We’ll see what the final agreement looks like.  It’s a bit premature to say that the “trade war” is over, or even that the end is in sight. It will be over when it’s over... until the next round of renegotiations.

    The “drop some barriers preventing American companies from operating in the country” is a big deal... if it actually happens.  It’s going to be difficult to enforce...

    The headlines about “trade deficits” sparking the trade war is B.S for the guy on the street.  Apple’s components (for example) are build all over the place, same with autos, the fact things get assembled in China distorts the picture.

    Bottom line is tariffs aren’t a good thing, and were a heavy handed approach to spark negotiations.  The U.S & China will benefit, and therefor Apple (etc) when they’re gone.

    Fingers crossed on IP.


    minicoffee
  • Reply 2 of 6
    crossladcrosslad Posts: 524member
    Apple hasn't suffered directly from tariffs.”

    Weren’t there reports of China ordering people to stop buying Apple products and of people being sacked for using iPhones?
    mwhitewatto_cobra
  • Reply 3 of 6
    StrangeDaysStrangeDays Posts: 11,574member
    crosslad said:
    Apple hasn't suffered directly from tariffs.”

    Weren’t there reports of China ordering people to stop buying Apple products and of people being sacked for using iPhones?
    Those were over the allegations of a chinese knockoff brand’s executive selling tech to Iran and being arrested for it. 
    minicoffeewatto_cobra
  • Reply 4 of 6
    dysamoriadysamoria Posts: 3,429member
    Does that mean Behringer synths will drop the $30 added to their prices a month ago? Rumor was that the trade war is why, for example the Neutron and Model D went from $299 to $329.

    i only just paid off my iPhone 6s, so I won’t be buying a new damned iPhone any time soon.
  • Reply 5 of 6
    anantksundaramanantksundaram Posts: 20,225member
    It ain’t over until it’s over. 
  • Reply 6 of 6
    designrdesignr Posts: 617member
    I'm trying to reconcile with this article: https://forums.appleinsider.com/discussion/209826/

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