Apple chargers and cases subject to US tariff increase
Apple's chargers and iPhone and iPad cases have so far been subject to tariffs on Chinese imports without affecting U.S. buyers, but that could be about to change.
Official prices for those accessories haven't moved since before 10% tariffs went into effect in September 2018, The Verge noted. Higher-profile Apple products like iPhones, AirPods and the Apple Watch were made exempt.
The tariffs that do affect Apple rose to 25% on Friday after U.S. President Donald Trump made good on a negotiation deadline. Some reports have claimed that China backtracked on earlier promises, and U.S. negotiators have been unwilling to budge on issues like intellectual property rules.
China retaliated on Monday by announcing hiked tariffs on $60 billion in U.S. goods, set to take effect June 1. Rates will range from 5% to 25%, the latter on products like natural gas, petrochemicals, soy oil, and peanut oil.
While Apple is thought to have high profit margins on accessories -- third-party options are often much cheaper -- it's uncertain how deep a cut to those margins it might be willing to accept. To offset the situation it may be able to secure discounts from suppliers, or even shift manufacturing outside of China, but the second option would likely be costly and time-consuming.
Apple partners Foxconn and Pegatron are working on building iPhones in India, though the scale of Indian operations is unlikely to reach Chinese levels in the near future.
Apple in September issued a letter to U.S. Trade Representative Robert Lighthizer, warning a then-proposed tariff hike would ultimately result in higher prices for U.S. consumers.
Official prices for those accessories haven't moved since before 10% tariffs went into effect in September 2018, The Verge noted. Higher-profile Apple products like iPhones, AirPods and the Apple Watch were made exempt.
The tariffs that do affect Apple rose to 25% on Friday after U.S. President Donald Trump made good on a negotiation deadline. Some reports have claimed that China backtracked on earlier promises, and U.S. negotiators have been unwilling to budge on issues like intellectual property rules.
China retaliated on Monday by announcing hiked tariffs on $60 billion in U.S. goods, set to take effect June 1. Rates will range from 5% to 25%, the latter on products like natural gas, petrochemicals, soy oil, and peanut oil.
While Apple is thought to have high profit margins on accessories -- third-party options are often much cheaper -- it's uncertain how deep a cut to those margins it might be willing to accept. To offset the situation it may be able to secure discounts from suppliers, or even shift manufacturing outside of China, but the second option would likely be costly and time-consuming.
Apple partners Foxconn and Pegatron are working on building iPhones in India, though the scale of Indian operations is unlikely to reach Chinese levels in the near future.
Apple in September issued a letter to U.S. Trade Representative Robert Lighthizer, warning a then-proposed tariff hike would ultimately result in higher prices for U.S. consumers.
Apple Tariff Letter by Mike Wuerthele on Scribd
Comments
The IP rights is one of the most important issues and of course the US should not budge a single inch on it.
Who wants to agree to a deal where you agree to allow the other party to continue to steal from you?
Whatever tariffs China introduced recently, let's double that and hit 'em again.
Small items like cases or chargers are not a big deal in my opinion. If the average consumer has to pay a little bit more for a few accessories, then it's worth it, because the long term goal is much more important than anything that will happen in the short term.
Beware the law of unintended consequences.
Apple has always been more expensive than Samsung.
My whole life I’ve had the option of buying much cheaper computers, phones, and electronics. But I never did.
Dont get me wrong, I am not a trump supporters and never will. I against most of the things he said and done. But this trade deal if it works will put his name on history.
Wrong! Apple contracted out manufacturing to Foxconn. Foxconn decided to build iPhone in China not Apple.
So we end up with some higher prices. Those cases, what is a it, a few cents to the normal price? I know what I do already when taxes get jacked up higher, I live in California where we have high taxes. I just cut my spending down. I buy a new iPhone every 4 years. I have the XS now and so I won't be getting a new iPhone until 2022. If other other countries had some guts. I guess they want to continue getting screwed by China. China will blink first. They ship and sell far, far more goods to the U.S. than the other way around. A lot of that is the tariffs the Chinese people pay for U.S. Imports. All that has to happen is things be far ore FAIR and equal, and the Tariffs will disappear.
By the way, Before American's were getting their money stolen in the form of TAXES. The U.S. Government used to run and pay for it's self from Tariffs.
This is really a one sided story. First of all, most of the Chinese goods are made in China by US companies. Apple is the best example. Second, the President being senile, chose to forget EPA. Remember EPA? It is the federal agency set up by US Congress in the 70s to regulate US companies regarding pollution. When US and China established diplomatic relationship, China welcomed US companies to make goods in China. US companies found out China does not have strong environmental regulation. They can make goods there with little concerns about pollution. Twenty years later China has severe pollution due to manufacturing. Do you and the President forget this? Third, China has large population and very is backward. Its labor is dirt cheap. More US companies found they can make products in China cheaply.
With these three very important points, which of them is by the Chinese government?
As for China blinking first, they have a better handle on dissension than the US does and no upcoming election for Xi to win. That said, I hope this gambit works, and works soon.
China can easily can around a US tariff increases by devaluing the Yuan. If that doesn’t work and you really push them up against the wall so to speak they can take the US economy down with it by tanking the US dollar.
I've been saying the same thing about China on this forum for ages, long before Trump ever entered into the equation.
There have been many articles written about China here in the past, and these same thoughts or similar thoughts have been expressed many times in the past, and not just by me. Going back many, many years.
And devaluing their currency is something that China has been doing for a long time already. It's about time that somebody stood up to them and their crappy practices.
And a low dollar is actually good for American exports.