Apple warns proposed tariffs will increase product prices
Company asks U.S. government to find more effective solutions
Apple, the world’s most valuable company, said proposed U.S. tariffs on $200 billion worth of products imported from China will raise prices for some of its popular consumer goods such as the Apple Watch and AirPods headphones.
The Mac mini desktop computer, Apple Pencil stylus accessory for iPads, various chargers and adapters and tooling equipment used to manufacture and design some products in the U.S. will also be affected, the Cupertino-based company told the Office of U.S. Trade Representative in a letter earlier this week.
The U.S. has imposed $50 billion worth of tariffs on Chinese goods with another $200 billion in the final stages. The public had until Thursday to comment on the administration’s plan. U.S. President Donald Trump said Friday he is considering another $267 billion of tariffs on China, which analysts said will affect virtually every category of consumer goods, to retaliate against what he calls unfair trade practices.
“Our concern with these tariffs is that the U.S. will be hardest hit,
and that will result in lower U.S. growth and competitiveness and higher prices for U.S. consumers,” Apple said in its letter.
Apple outlined how the company’s operations and products will be affected by the tariffs. Shares, which had earlier gained 1 percent, fell about 0.8 percent to close at $221.30 on the news.
The company said the tariffs would “show up as a tax on U.S. consumers” and “increase the cost of Apple products that our customers have come to rely on in their daily lives.” Apple Chief Executive Officer Tim Cook earlier this year told Trump tariffs “were not the right approach.”
In the letter, Apple asks the U.S. government to “reconsider these measures and work to find other, more effective solutions that leave the U.S. economy and U.S. consumer stronger and
“Our concern with these tariffs is that the U.S. will be hardest hit.” — Apple, in a letter to the U.S government
healthier than ever before.”
Beyond the core products, Apple said accessories like the HomePod speaker, some Beats speakers, AirPort and Time Capsule internet routers, the Magic Mouse and Magic Trackpad, and leather cases for the iPhone, iPad, MacBook and Apple Pencil would be affected. It said some of the parts it relies on for product development, including processors and research equipment,
would also be hit by the tariffs.
In pushing back on the proposal, Apple said it bought more than $50 billion worth of components from U.S.-based suppliers last year and that it’s the largest U.S. corporate tax payer. It also said that every Apple product “contains parts or materials from the United States and is made with equipment from U.S.-based suppliers.” Earlier this year, the company said that as part of tax reform it would spend $350 billion in the U.S. over the next five years.
Apple generated $9.6 billion in sales in China in the fiscal third quarter, accounting for 18 percent of its total revenue in the period.