Apple says that Trump's looming tariffs on China would increase prices on Apple Watch and AirPods

Drew Angerer/Getty ImagesApple CEO Tim Cook.
  • Apple opposes tariffs proposed by the Trump administration on $US200 billion worth of Chinese goods.
  • The tariffs are currently in a period of public comment.
  • Apple said that the proposed tariffs “show up as a tax on the consumer” and will raise the price of several Apple products, including Apple Watch and AirPods.

Apple said that tariffs on $US200 billion worth of Chinese goods proposed by the Trump administration could result in higher prices for its products in a letter to the government published on Friday.

In it, Apple says the proposed tariffs would “cover a wide range of Apple products” as well as other materials that Apple uses to make its products.

Those products include Apple Watch and AirPods, two of Apple’s core product lines. “Second, because all tariffs ultimately show up as a tax on U.S. consumers, they will increase the cost of Apple products that our customers have come to rely on in their daily lives,” Apple wrote in the letter.

Here’s a chart with the consumer products Apple expects to be affected. The full letter, which includes a chart with affected Apple components, is at the bottom of this post:

Screen Shot 2018 09 07 at 4.22.22

From Apple’s comment, dated September 5:

“The proposed tariff list covers a wide range of Apple products and the products used in our U.S. operations: Apple digital health and wireless connectivity products, including Apple Watch, Apple Pencil and Air Pods; Apple computing tools such as MacMini; Apple adapters, cables and chargers engineered for efficiency and safety; Apple-designed components and made-to-specification tooling for Apple’s U.S. manufacturing and product repair facilities; specialty testing equipment for Apple’s U.S. product development labs; and servers, hard drives and cables for Apple’s U.S. data centres that support our global services such as the App Store.”

On Friday, President Donald Trump said the tariffs could be implemented “very soon,” but White House economic adviser Larry Kudlow said the administration would evaluate public comments – like Apple’s – before making any final decisions.

Economists argue that Trump’s tariffs could cause the cost of goods to increase for businesses and consumers in the United States, a point of view Apple agrees with in the unsigned letter. Apple also said that tariffs would harm Apple compared to its international competitors.

In addition, proposed tariffs require time and effort to evaluate, Apple CEO Tim Cook said during the company’s last earnings call.

“Our view on tariffs is that they show up as a tax on the consumer and wind up resulting in lower economic growth and sometimes can bring about significant risk of unintended consequences,” Cook said. “That said, the trade relationships and agreements that the U.S. has between the U.S. and other major economies are very complex and it’s clear that several are in need of modernising, but we think that in the vast majority of situations that tariffs are not the approach to doing that and so we’re sort of encouraging dialogue and so forth.”

“I can’t predict the future, but I am optimistic that the countries will get through this and we are hoping that calm heads prevail,” he continued.

An Apple representative didn’t have anything to add to the letter.

Apple shares dropped over 1% shortly after the letter was published but have been flat in after-hours trading.

Read the entire letter below:

P Apple Inc Section 301 List 3Comments by Kif Leswing on Scribd

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