US denies Apple tariff relief on remaining five Mac Pro parts

Posted:
in General Discussion edited December 2019
After the U.S. Trade Representative's office granted in part Apple's request for tariff exemptions on Chinese-made Mac Pro parts earlier in September, a move that helped inform a decision to assemble the computer domestically, the government body on Monday denied identical appeals on five remaining components.

Mac Pro


The determination denies relief from a 25% tax levied on the 2019 Mac Pro's cooling system, an input/output circuit board, power supply, power cable, chassis wheels and processor cooling system, reports Bloomberg.

According to USTR documents filed today, Apple's requests "failed to show that the imposition of additional duties on the particular product would cause severe economic harm to [Apple] or other U.S. interests."

The Cupertino tech giant was awaiting word on the final five line items after receiving waivers for 10 components on Sept. 20. The initial grant extended tariff relief to a variety of parts including complete circuit boards, a machined aluminum enclosure and accessories like Magic Mouse and Magic Trackpad.

Apple initially filed the requests for exclusion in July hoping to avoid a 25% tariff -- due to rise to 30% on Oct. 15 -- the Trump administration levied on computer parts imported from China as part of an ongoing trade war.

Trump balked at reports detailing Apple's exemption bid and said the company would not receive the waivers it requested. He later implied the company would be prompted to build a manufacturing plant in Texas, an unsubstantiated statement that countered reports claiming Apple had tapped supply partner Quanta Computer to manufacture the current-generation Mac Pro in China.

Apple is building a $1 billion campus in Austin, but the facility is expected to serve research and development, operations, cloud computing and other areas not related to manufacturing.

Apple CEO Tim Cook addressed tax exclusions and Mac Pro production during a quarterly earnings conference call in July.

"In terms of the exclusions, we've been making the Mac Pro in the U.S. and we want to continue to do that, so we're working and investing currently in capacity to do so, because we want to continue to be here," he said.

Three days after receiving positive news on its trade request earlier this month, Apple announced plans to assemble the professional desktop at an existing facility in Austin, Texas, where the outgoing cylindrical Mac Pro has been produced since 2013.

Trump stayed mum on the subject until Monday, when he lauded the company's decision to assemble Mac Pro in Texas.

"Great news! @Apple announced that it is building its new Mac Pro in Texas. This means hundreds of American jobs in Austin and for suppliers across the Country. Congratulations to the Apple team and their workers!" he said in a tweet that included a link to a Fox News story published last week.

Unveiled at the Worldwide Developers Conference in June, the all-new Mac Pro boasts a bevy of high-end technology catering to media and content creation professionals. The Mac flagship carries a starting price of $5,999, while an equally high-tech 6K monitor, dubbed Apple Pro Display XDR, is priced at $4,999. Both are slated to ship this fall.
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Comments

  • Reply 1 of 26
    aplnubaplnub Posts: 2,605member
    On such an expensive niche computer, I can't see this as an issue.
    spice-boycurtis hannahjbdragondisneylandmanberndogargonautCarnageviclauyycmichelb76watto_cobra
  • Reply 2 of 26
    aplnub said:
    On such an expensive niche computer, I can't see this as an issue.
    I think you mean expensive cheese grater /s
    aplnubberndogmobirdbigtds
  • Reply 3 of 26
    Hasn't Apple already decided to build it in the US? That would make all of those non US extra components less than 20% of the device? Considering the device is $6000 having roughly $250 in tariffs makes no significant difference.
    aplnubjbdragongatorguywatto_cobra
  • Reply 4 of 26
    jbdragonjbdragon Posts: 2,246member
    Hasn't Apple already decided to build it in the US? That would make all of those non US extra components less than 20% of the device? Considering the device is $6000 having roughly $250 in tariffs makes no significant difference.
    It's less profit for Apple unless they mark it up that much.  Either way, it's not much over the overall cost of the computer anyway.   After all the Monitor stan alone is a grand.

    forgot usernameviclauyycwatto_cobra
  • Reply 5 of 26
    They should put me in charge of tariff exclusions.  I can flip a coin with the best of them...

    Joking.  Not Joking.
    jahbladezeus423kuraiforgot usernamecornchipviclauyycwatto_cobra
  • Reply 6 of 26
    65026502 Posts: 379member
    Oh oh, may have to dip into the executives' salary to make up for these tariffs. The horror.
    agilealtitudeberndogjbdragoncornchipdysamoria
  • Reply 7 of 26
    flydogflydog Posts: 1,027member
    Hasn't Apple already decided to build it in the US? That would make all of those non US extra components less than 20% of the device? Considering the device is $6000 having roughly $250 in tariffs makes no significant difference.
    Apple will be assembling in the US, not manufacturing.
    Solirevenantarlorgatorguyjbdragonforgot usernameviclauyycstevenozwatto_cobra
  • Reply 8 of 26
    SoliSoli Posts: 10,032member
    flydog said:
    Hasn't Apple already decided to build it in the US? That would make all of those non US extra components less than 20% of the device? Considering the device is $6000 having roughly $250 in tariffs makes no significant difference.
    Apple will be assembling in the US, not manufacturing.
    And assembly of final product at that. It's likely that most of the components will still be made outside the US that many of the US-built components will still have ties to manufacturing and/or sourcing outside the US. Let's just hope this doesn't cause issues like it did with the previous Mac Pro.
    watto_cobra
  • Reply 9 of 26
    dedgeckodedgecko Posts: 169member
    Given Apple has not offered full pricing on the New Mac Pro, any tariffs are easily absorbed or mitigated across the higher models whose pricing was previously unknown.
    gatorguywatto_cobra
  • Reply 10 of 26
    tzeshantzeshan Posts: 2,351member
    Apple probably can sue US government for unfair competition if there is another foreign maker that does not use China made parts. 
    watto_cobra
  • Reply 11 of 26
    Consumers will be the losers because they will pay a higher price. Rationally, the Mac Pro should be priced lower in Canada since their trade policy isn't conducted through bullying.
    viclauyycwatto_cobra
  • Reply 12 of 26
    EsquireCatsEsquireCats Posts: 1,210member
    In theory only the US customers would need to have the US-assembled model to minimise the costs incurred by tariffs. So it's fair to say that the tariff costs won't be a very high cost to Apple for this particular product.

    It is wholly naive to believe that this will cause systemic change in the US manufacturing industry, trying to import the manufacturing jobs into the USA is a huge step backwards for the USA. I've said this before, the USA is already in the sweet spot: creating the IP which is sold at high value, while outsourcing the low-wage, low-cost production jobs to other countries. The product simply wont exist on USA wages, so why live in a fantasy world of US-citizens working for $50 a day? (Who would even want that?)

    edited October 2019 viclauyycwatto_cobra
  • Reply 13 of 26
    I just read about the doomsday nuke that can hit the US in 30 minutes or less with devastating force that China will be showing off in its 70th anniversary military parade. They claim they are a peace loving nation.  You have to wonder why US manufacturers (hello Apple) continue to invest in a country that has developed a weapon specifically designed to inflict massive damage on the US? Apple should invest in super advanced robotic assembly so they can stop relying on cheap Chinese labor to build their products. That would scare the Chinese more than American weaponry.  


    jbdragon
  • Reply 14 of 26
    razorpitrazorpit Posts: 1,796member
    tedz98 said:
    I just read about the doomsday nuke that can hit the US in 30 minutes or less with devastating force that China will be showing off in its 70th anniversary military parade. They claim they are a peace loving nation.  You have to wonder why US manufacturers (hello Apple) continue to invest in a country that has developed a weapon specifically designed to inflict massive damage on the US? Apple should invest in super advanced robotic assembly so they can stop relying on cheap Chinese labor to build their products. That would scare the Chinese more than American weaponry.  


    Thank you Bill Clinton.

    I agree. China forgets we control their economy. Not them. The US pulls out they have nothing to support their current system. That alone could lead to a war.
    watto_cobra
  • Reply 15 of 26
    cincyteecincytee Posts: 353member
    tedz98 said:
    I just read about the doomsday nuke that can hit the US in 30 minutes or less with devastating force that China will be showing off in its 70th anniversary military parade. They claim they are a peace loving nation.  You have to wonder why US manufacturers (hello Apple) continue to invest in a country that has developed a weapon specifically designed to inflict massive damage on the US? Apple should invest in super advanced robotic assembly so they can stop relying on cheap Chinese labor to build their products. That would scare the Chinese more than American weaponry.  
    Because that weapon isn't designed with only the U.S. in mind. China shares borders with Russia, India and most of the -stans. They're not exactly the most stable places on earth. I agree that U.S. companies should invest in domestic manufacturing for our national economic security, but I wonder why you think we should be trying to scare the Chinese as a way to make them think we're less of a threat.
    viclauyycwatto_cobra
  • Reply 16 of 26
    wizard69wizard69 Posts: 13,377member
    jbdragon said:
    Hasn't Apple already decided to build it in the US? That would make all of those non US extra components less than 20% of the device? Considering the device is $6000 having roughly $250 in tariffs makes no significant difference.
    It's less profit for Apple unless they mark it up that much.  Either way, it's not much over the overall cost of the computer anyway.   After all the Monitor stan alone is a grand.

    Much of that stuff can be built in the USA or non China locations.  Apple needs to get out of China and aiding a government that will end up being a disaster for all of humanity.  
    cornchipwatto_cobra
  • Reply 17 of 26
    wizard69wizard69 Posts: 13,377member
    cincytee said:
    tedz98 said:
    I just read about the doomsday nuke that can hit the US in 30 minutes or less with devastating force that China will be showing off in its 70th anniversary military parade. They claim they are a peace loving nation.  You have to wonder why US manufacturers (hello Apple) continue to invest in a country that has developed a weapon specifically designed to inflict massive damage on the US? Apple should invest in super advanced robotic assembly so they can stop relying on cheap Chinese labor to build their products. That would scare the Chinese more than American weaponry.  
    Because that weapon isn't designed with only the U.S. in mind. China shares borders with Russia, India and most of the -stans. They're not exactly the most stable places on earth. I agree that U.S. companies should invest in domestic manufacturing for our national economic security, but I wonder why you think we should be trying to scare the Chinese as a way to make them think we're less of a threat.
    Make no mistake here, the only reason China embraced economic development is to build a war machine.    They still have come to terms with WW2 and as such expect those muzzles to target Japan as well as many other allies of the USA.   Sadly we should have wiped out the communist party when we had an overwhelming advantage.   Instead we have a country that is much like Nazi Germany with their ethnic cleansing.  
    jbdragoncornchipwatto_cobra
  • Reply 18 of 26
    tzeshantzeshan Posts: 2,351member
    tedz98 said:
    I just read about the doomsday nuke that can hit the US in 30 minutes or less with devastating force that China will be showing off in its 70th anniversary military parade. They claim they are a peace loving nation.  You have to wonder why US manufacturers (hello Apple) continue to invest in a country that has developed a weapon specifically designed to inflict massive damage on the US? Apple should invest in super advanced robotic assembly so they can stop relying on cheap Chinese labor to build their products. That would scare the Chinese more than American weaponry.  


    I think China developed such weapon for self-defense, A few years ago a six years old said publicly on US TV that US should go to the other side of the earth to kill all Chinese. Who knows this six years old will not become US President in the future? 
  • Reply 19 of 26
    jbdragonjbdragon Posts: 2,246member
    TTEsty said:
    Consumers will be the losers because they will pay a higher price. Rationally, the Mac Pro should be priced lower in Canada since their trade policy isn't conducted through bullying.
    Considering China has been bullying as you call it to the U.S. for ages, it is what it is.  Considering these are Mac Pro's, that are already out of the price range for most people anyway, that has a $1000 monitor stand, the small number of tariffs Apple has to pay on a few parts is no big deal.  
  • Reply 20 of 26
    jbdragonjbdragon Posts: 2,246member
    wizard69 said:
    jbdragon said:
    Hasn't Apple already decided to build it in the US? That would make all of those non US extra components less than 20% of the device? Considering the device is $6000 having roughly $250 in tariffs makes no significant difference.
    It's less profit for Apple unless they mark it up that much.  Either way, it's not much over the overall cost of the computer anyway.   After all the Monitor stan alone is a grand.

    Much of that stuff can be built in the USA or non China locations.  Apple needs to get out of China and aiding a government that will end up being a disaster for all of humanity.  
    The U.S. makes some of the parts, and some of the other stuff could be done in the U.S.  But its taken YEARS of our tech leaving the U.S. along with hardware all moving to China and being done there.  Trying to change that overnight is impossible.  Trying to bring it all back is impossible.  Some of it can be brought back.  But what I think will happen and should happen, is these companies will diversify.  Instead of all their balls in China, they'll expand or move to some other countries.  China has had a growing middle class, but their laws are just crazy.  A U.S. business can't go into China and build a factory.  They have to partner up with Chinese business and show all their trade secrets which then end up copied.  Non-Chinese have NO rights.  You go to court and are not Chinese, you're going to lose no matter what.

    I think if this trade war ends today, it doesn't matter, it's too late for China.  Companies will start building in other countries.  It may not be the BEST.  Because the countries are not built up and modernize like China is in areas. The people aren't as trained or as MANY as in China.  So I would expect more robots.  But China didn't use to be how it is now.  These other countries could end up having their own industrial revolution.   A growing middle class.  Stop being just another poor country.  You get money coming in, and it starts to spread to others and more and more small businesses start popping up.   This is more of the nation-building I'd like to see.   
    stevenoz
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