When US President Trump first tossed out the idea of starting a trade war with China, there was a serious chance those taxes would impact the prices of gadgets in the US.
And wouldn’t you know it, after seeing an outline of products that would be hit by the US government’s 25 per cent tax on $US200 billion-worth ($280 billion-worth) of imported Chinese tech, Apple penned a letter to the United States Trade Representative essentially saying, “Hey, would you not?”
In the letter, Apple says the tariff list “covers a wide range of Apple products and the products used in our US operations,” including the Mac Mini, Apple power adaptors, cables, the Apple Watch, the Apple Pencil and Air Pods. (For a full list of tariff codes, see the full letter at the bottom of this story.)
Notably, the iPhone was not cited as part of Apple’s potentially impacted devices, possibly because of an exemption the Trump administration promised to negotiate on behalf of Apple earlier this year.
Still, Apple’s business would no doubt face some serious headwinds due to possible tariffs, and Apple continued on to say: “Our concern with these tariffs is that the US will be hardest hit, and that will result in lower US growth and competitiveness and higher prices for US consumers.”
Apple also said that, “given the balance of Apple’s economic footprint, the burden of the proposed tariffs will fall much more heavily on the United States than on China. The traditional method of calculating the US trade balance attributes the entire value of our products to the country where final assembly is located, in most cases China.”
So there you have it. For gadget nerds, this seems like a sad and obvious conclusion to the spate of escalating tariffs that the US and China have been slinging back and forth since Trump got all this started back in autumn.
Now imagine if, before the end of the year, a base 13-inch MacBook Pro that would normally cost $US1300 ($1818) is suddenly priced closer to $US1600 ($2237) after the cost increase from added tariffs gets passed along to consumers. It’s easy to see why both business and consumers would be concerned by the tax.
Hopefully, this reality doesn’t come to pass, but it could, and from where I’m sitting, I’m not seeing any way the US earns a win from this plan of action.