Trump hesitates over instituting China tariffs that would hurt Apple

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in General Discussion edited January 21

Trump's day-one tariffs on China haven't been implemented yet, but he's still maintaining the fiction that it isn't American consumers who will pay the price.

Two men sit at a table in conversation, one gesturing, with microphones and glasses of water in front.
Tim Cook (left) and Trump (right)



There is no gray area here: tariffs are not a tax on other countries, they result solely in higher prices for Americans. Nonetheless, as he did during his first term, President Trump is again imposing tariffs, just not yet on China.

During the campaign, he committed to introduce tariffs on his first day in office, and specifically that he would levy a 60% tariff on imports from China, plus a further 10% duty on Chinese goods. None of that happened, and instead newly announced tariffs will instead start from February 1, 2025, for Mexico and Canada.

Those countries will face up to 25% tariffs, though there has been no specific figure yet.

It's any tariff on imports from China that will make a difference to Apple, and to its prices, because such a large proportion of its manufacturing is done there. Trump has avoided committing to the China tariffs he previously promised, but did once more promise to impose them at some point.

He also threatened tariffs on the ten countries known as the BRICS grouping, which includes China. Trump further said he would increase tariffs and imposes taxes on China, again by unspecified amounts, if Beijing blocked the sale of TikTok to a US firm.

An unspecified source said to be familiar with the reasoning behind the hesitation over Chinese tariffs, said that Trump was instead keen to make a deal with President Xi Jinping. However, other sources reportedly say that as with his first term, Trump changes his mind quickly and may yet introduce tariffs on Chinese goods.

One other possible reason for delays is that Trump also wants to create an external revenue service to collect tariff revenues. That would require Congressional approval, and it's not clear how it would differ from the existing processes -- or why Trump didn't also hesitate over Canada and Mexico tariffs.

The result is that US businesses are no clearer on how their costs will rise, so their US customers are little clearer on how prices will go up.

What it is not, and has never been, is an economic cost imposed on the countries where manufacturing is performed for US consumers. And, tariff price hikes are nearly always passed directly on to the consumer by the US companies who must pay the tariffs.

How this affects Apple and its prices



Apple does have an advantage in that it has previously persuaded Trump to grant it exemptions, although not consistently. Plus over the last many years, Apple has been working to reduce its dependence on China, with its suppliers moving production to countries such as India.

A stated aim of the tariffs is that it will actually move production and manufacturing to the US. If it becomes more expensive to manufacture overseas, goes the reasoning, then firms will invest billions in building factories in the US that they may not need after the next Administration.

However, it's more likely that firms will move from China to other countries that have a manufacturing base that the US lacks that the US imposes lower tariffs on. Trump could always then increase those tariffs to match, but it would still probably be more economic for firms to take that hit rather than pay comparatively higher US wages.

Apple has already been making this shift, most notably to India as of late. It is doing this, Apple CEO Tim Cook says, mostly because of the skill shortage in the US rather than the cost of salaries.

Impact on consumers



In an October 2024 report, the Consumer Technology Association (CTA) examined how the proposed tariffs would affect consumers. As part of that, the CTA concluded that companies will not relocate to the US, and more that there will be what it called "unintended consequences."

Those include the US credit rating being downgraded, and increased trade restrictions imposed on the States by other countries. It will also have less specifically measurable, yet significant, damage because of how it will reduce the reputation of the US overseas.

Until specific tariffs are imposed, it's impossible to estimate how badly US consumers will be affected -- even though it is certain that it will be bad. The CTA report estimated that laptop computers and tablets might even be priced 46% higher than at at present, while desktop computers could rise 6.2%.

Apple is a multi-trillion dollar company so at least in theory it could absorb these rises. It could decide to do so rather than see its number of sales drop, with the logic that a customer lost now is harder to win back after the tariffs end.

However, practically invariably, when any company is hit with a tariff, it is the end user, the consumer, who has to pay it.

Trump has now said that tariffs will "make us rich as hell." It will not be Americans who profit, but the higher prices consumers pay as a result of the import tariffs will go to the government.



Read on AppleInsider

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Comments

  • Reply 1 of 29
    It's very depressing to see the US political landscape. 8 years ago I was angry. Now I'm mostly depressed.
    gatorguyNickoTTiOS_Guy80quakerotisFredrikurjeffharrisblastdoornapoleon_phoneapartdewmelondor
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  • Reply 2 of 29
    I find the concept of putting a man that probably can't even spell his own name in charge of these things to be totally baffling.
    iOS_Guy80Fredrikursconosciutojeffharrisnapoleon_phoneapartdewmelondordavkurai_kageOfer
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  • Reply 3 of 29
    T**** (the convicted felon and sexual predator) is a criminal. 

    Tim Cook is complicit with a criminal.
    sconosciutodewmeOferronngrandact73williamlondonprairiewalker
     3Likes 4Dislikes 0Informatives
  • Reply 4 of 29
    T**** (the convicted felon and sexual predator) is a criminal. 

    Tim Cook is complicit with a criminal.
    Well, what can (Cook) do? He navigates the minefield admirably.
    muthuk_vanalingamsconosciutobsimpsenssfe11dewmelondordavnetroxnubuskurai_kage
     17Likes 0Dislikes 0Informatives
  • Reply 5 of 29
    T**** (the convicted felon and sexual predator) is a criminal. 

    Tim Cook is complicit with a criminal.
    I don’t perceive Cook to be happily collaborating like Musk and Bezos and other billionaire scum (but I repeat myself). The Traitor-in-Chief will be in the office four more years, it’s Cook’s duty to employees and shareholders to advocate for Apple with whoever occupies the office.
    edited January 21
    muthuk_vanalingamjeffharrisbsimpsenssfe11londordavnetroxnubuskurai_kageOfer
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  • Reply 6 of 29
    FYI: the current trade agreements for North America and China were negotiated by the 1st Trump administration. Trump abandoned both NAFTA and TPP in order to do his own deals during his first term. So if he thinks the U.S. is being taken advantage of by Mexico/Canada/China per trade, then that means his own deals were garbage.
    edited January 21
    muthuk_vanalingamnapoleon_phoneapartdewmelondordavtmaycanukstormsconosciutokurai_kageOfer
     17Likes 0Dislikes 1Informative
  • Reply 7 of 29
    Tariffs will just trigger tariffs on US goods.

    the man who managed to bankrupt multiple gambling casinos is hardly an economic genius.
    foregoneconclusionssfe11napoleon_phoneapartdewmelondordavnubuskurai_kageOferhmlongco
     17Likes 0Dislikes 0Informatives
  • Reply 8 of 29
    FYI: the current trade agreement with Mexico and Canada was negotiated by the 1st Trump administration. That Trump trade agreement is what replaced NAFTA. So if he thinks Mexico/Canada are taking advantage of the U.S., it's because his own deal was garbage. 
    Do facts matter with cultists? I am from India and in similar situation to you guys in terms of dealing with cultists. Facts just do NOT matter to them. Only difference - We are in a slightly worser position here in India. Cultists have elected same PM for 3rd consecutive term (yes, it is allowed here, unlike US). And the signs are not looking good for next election in 2029 either.
    edited January 21
    napoleon_phoneapartdewmelondordavsconosciutokurai_kageOferronn12Strangersdanox
     11Likes 0Dislikes 0Informatives
  • Reply 9 of 29
    FYI: the current trade agreement with Mexico and Canada was negotiated by the 1st Trump administration. That Trump trade agreement is what replaced NAFTA. So if he thinks Mexico/Canada are taking advantage of the U.S., it's because his own deal was garbage. 
    Do facts matter with cultists? I am from India and in similar situation to you guys in terms of dealing with cultists. Facts just do NOT matter to them. Only difference - We are in a slightly worser position here in India. Cultists have elected same PM for 3rd consecutive term (yes, it is allowed here, unlike US). And the signs are not looking good for next election in 2029 either.
    Correct, not with cultists BUT the most recent U.S. election wasn't determined by Trump's cult. It was largely determined by a combo of lower Democratic turnout + a large number of voters that were upset with inflation and blamed Biden. Inflation is a fact. 
    dewmedavblastdoorOferronn12Strangersjibwatto_cobra
     5Likes 3Dislikes 0Informatives
  • Reply 10 of 29

    Tariffs will just trigger tariffs on US goods.

    the man who managed to bankrupt multiple gambling casinos is hardly an economic genius.
    Yep. Trump's tariffs on soybeans from China resulted in retaliatory tariffs by China that hurt U.S. soybean farmers so badly that they needed a taxpayer funded bailout.

    https://www.forbes.com/sites/stuartanderson/2020/01/21/trump-tariff-aid-to-farmers-cost-more-than-us-nuclear-forces/
    napoleon_phoneapartdewmelondordavtmaysconosciutonubuskurai_kageOferronn
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  • Reply 11 of 29
    blastdoorblastdoor Posts: 3,669member
    I wonder if there might be a sense in which China does partially pay for the tariffs indirectly, for two reasons. First, Trumps overall bundle of policies is likely to be inflationary, which leads to higher interest rates. Higher interest rates attract foreign investors which pushes the dollar higher. A stronger dollar makes imports less expensive. This feedback loop is a second order effect and by itself won’t offset the higher tariffs, but it’s a piece of the puzzle.

    Another piece of the puzzle is that China isn’t a “normal” country, which is to say it doesn’t behave the way economics text books assume. The Chinese economy is deeply distorted and unbalanced by government policies. They have vastly over invested in housing and infrastructure. And the CCP dreads the political instability from mass unemployment. They also have a weird ideological opposition to domestic consumption.

    So, to maintain employment and the stability of the regime, their choice could be between building yet another bridge to nowhere or selling manufactured goods abroad at a huge loss. That’s the pathway by which Trumps claim might be at least partly true. 
    davtmayWesley Hilliardronn12Strangersthtwatto_cobradanox
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  • Reply 12 of 29
    blastdoor said: So, to maintain employment and the stability of the regime, their choice could be between building yet another bridge to nowhere or selling manufactured goods abroad at a huge loss. That’s the pathway by which Trumps claim might be at least partly true. 
    See my post above: Trump's tariffs require enormous taxpayer funded bailouts of U.S. industry. It's not going to be any different the 2nd time around. There's no silver lining to tariffs, especially when the trade deals in question were already negotiated by the 1st Trump administration. It's like a dog chasing its own tail...doesn't lead anywhere.
    edited January 21
    avon b7dewmemuthuk_vanalingamlondordavsconosciutoronn12Strangerswatto_cobradanox
     11Likes 0Dislikes 0Informatives
  • Reply 13 of 29
    blastdoorblastdoor Posts: 3,669member
    FYI: the current trade agreement with Mexico and Canada was negotiated by the 1st Trump administration. That Trump trade agreement is what replaced NAFTA. So if he thinks Mexico/Canada are taking advantage of the U.S., it's because his own deal was garbage. 
    Do facts matter with cultists? I am from India and in similar situation to you guys in terms of dealing with cultists. Facts just do NOT matter to them. Only difference - We are in a slightly worser position here in India. Cultists have elected same PM for 3rd consecutive term (yes, it is allowed here, unlike US). And the signs are not looking good for next election in 2029 either.
    Correct, not with cultists BUT the most recent U.S. election wasn't determined by Trump's cult. It was largely determined by a combo of lower Democratic turnout + a large number of voters that were upset with inflation and blamed Biden. Inflation is a fact. 
    100% right. There's a lot more heterogeneity in the electorate than media (not just old media but all media) narratives ignore 
    sconosciutoronnwatto_cobra
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  • Reply 14 of 29
    blastdoorblastdoor Posts: 3,669member

    blastdoor said: So, to maintain employment and the stability of the regime, their choice could be between building yet another bridge to nowhere or selling manufactured goods abroad at a huge loss. That’s the pathway by which Trumps claim might be at least partly true. 
    See my post above: Trump's tariffs require enormous taxpayer funded bailouts of U.S. industry. It's not going to be any different the 2nd time around. There's no silver lining to tariffs, especially when the trade deals in question were already negotiated by the 1st Trump administration. It's like a dog chasing its own tail...doesn't lead anywhere.
    I don't disagree. Trump sometimes stumbles on an issue where the conventional wisdom is wrong. But he's totally incompetent from a policy perspective. He has no idea how to accomplish substantive things in the real world, because his 'business success' is through fraud, not creating real wealth. In a way this is good because his incompetence can temper his malevolence. He could compensate for this if he surrounded himself with competent people and let them do their jobs. He kinda-sorta tried that in the first term, but realized that competent people sometimes disagree with him, which he doesn't like. So now he's surrounding himself with incompetent lackeys.

    In a lot of ways, the Biden administration brought the policy competence to actually make progress on issues that Trump stumbled upon. Trump kept talking about 'infrastructure', but never accomplished anything -- under Biden, an infrastructure law was passed. The CHIPS act is an example of a concrete, real world policy that is having the desired effect -- there is a TSMC plan in Arizona that absolutely would not have otherwise been there. When pairing that type of policy with targeted tariffs, it's possible to make progress. But Trump isn't going to pull that off. 


    12Strangerswatto_cobraroundaboutnow
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  • Reply 15 of 29
    FYI: the current trade agreement with Mexico and Canada was negotiated by the 1st Trump administration. That Trump trade agreement is what replaced NAFTA. So if he thinks Mexico/Canada are taking advantage of the U.S., it's because his own deal was garbage. 
    Do facts matter with cultists? I am from India and in similar situation to you guys in terms of dealing with cultists. Facts just do NOT matter to them. Only difference - We are in a slightly worser position here in India. Cultists have elected same PM for 3rd consecutive term (yes, it is allowed here, unlike US). And the signs are not looking good for next election in 2029 either.
    I wouldn't be so sure that TFG and his cult won't attempt to undermine or replace the 22nd Amendment. When the "textual originalist" Extreme Court decides that the President of the United States has the power of a king, nothing is safe other than the 2nd Amendment of course.

    ...which one day might be the only recourse The Resistance has left to it.
    ronnthtjibwatto_cobra
     3Likes 1Dislike 0Informatives
  • Reply 16 of 29

    blastdoor said: So, to maintain employment and the stability of the regime, their choice could be between building yet another bridge to nowhere or selling manufactured goods abroad at a huge loss. That’s the pathway by which Trumps claim might be at least partly true. 
    See my post above: Trump's tariffs require enormous taxpayer funded bailouts of U.S. industry. It's not going to be any different the 2nd time around. There's no silver lining to tariffs, especially when the trade deals in question were already negotiated by the 1st Trump administration. It's like a dog chasing its own tail...doesn't lead anywhere.

    It gets the rubes ginned up and distracts them from what is really going on. It's hardly pointless.
    ronn
     1Like 0Dislikes 0Informatives
  • Reply 17 of 29


    Tariffs will just trigger tariffs on US goods.

    the man who managed to bankrupt multiple gambling casinos is hardly an economic genius.
    Yep. Trump's tariffs on soybeans from China resulted in retaliatory tariffs by China that hurt U.S. soybean farmers so badly that they needed a taxpayer funded bailout.

    https://www.forbes.com/sites/stuartanderson/2020/01/21/trump-tariff-aid-to-farmers-cost-more-than-us-nuclear-forces/
    so he created a problem so that a constituency needed to come to him and ask for his help.

    I am pretty sure that was a feature not a bug.
    ronn12Strangers
     2Likes 0Dislikes 0Informatives
  • Reply 18 of 29

    It's very depressing to see the US political landscape. 8 years ago I was angry. Now I'm mostly depressed.
    Moving abroad, in case anyone is thinking of it, is really not a very good nor a practical solution.

    Assuming one finds a path to legal citizenship or residency abroad - it's generally anywhere from difficult to near-impossible unless one already has dual citizenship - there is the matter of figuring out what sort of tax burden you may be subjecting yourself to. The US taxes the worldwide income of its citizens regardless of where it was earned, one of only two nations that do this.

    Then there's the not-insignificant matters of pensions. Are you really in a position to potentially stop contributing to SS? Also, if you are fortunate enough to get a job abroad, you may well be obligated to pay hefty taxes to a pension scheme you may never qualify to use.

    Speaking of getting a job abroad, if you're counting on having employment to sustain your new life abroad do you speak the local language fluently? Unless you're going to an English-speaking country, this can be an impossible hurdle to overcome. Think about how little Americans like dealing with call centers where the agents speak a flavor of heavily-accented English. Now imagine the agent is you and you have all sorts of skills... except you can only haltingly speak the local language. You're going to find menial employment unless you get a job teaching American English and that is usually poorly-paid work  as well along with abusive labor conditions because the boss knows there's another dozen desperate-for-work Americans waiting to take your job if you don't like it.

    Are you ready to leave your friends and family behind? To try making new friends abroad? Some places (usually cities and the bigger the better) can be welcoming to immigrants while out in the charming rural areas you could find yourself shut out of a fulfilling social life because the locals don't trust outsiders or because you've committed some sort of social faux pas you were unaware of.

    Homesickness is a very real thing no matter how beautiful your new, foreign home is.

    If it doesn't work out, are you in a position to return to the US or will you be betting your nest egg on the move? If the latter is the case I *strongly* advise against it.
    edited January 21
    ronnmuthuk_vanalingamroundaboutnow
     1Like 1Dislike 1Informative
  • Reply 19 of 29
    sflocalsflocal Posts: 6,150member
    T**** (the convicted felon and sexual predator) is a criminal. 

    Tim Cook is complicit with a criminal.
    Get over it.  

    Cook is playing the cards he was dealt.  
    ronnmuthuk_vanalingam12Strangersblastdoorjibwatto_cobrassfe11roundaboutnow
     6Likes 2Dislikes 0Informatives
  • Reply 20 of 29
    Tim Cook is complicit with a criminal.
    When you get right down to it, so is half the country...
    ronnsconosciuto12Strangersjibwatto_cobramacxpressssfe11roundaboutnow
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