Trump tariffs could boost Apple prices up to 20%
That Apple Watch you had your eye on? It could become more expensive, depending on how President Donald Trump’s trade war with China turns out.
Last week, Apple wrote to U.S. Trade Representative Robert Lighthizer that a proposal to impose tariffs on $200 billion worth of products imported into the U.S. from China – including a range of the company’s products – could lead to higher prices for customers.
Trump has already slapped tariffs on about $50 billion worth of goods from China, and he’s threatened tariffs on billions more, including levies of up to 25 percent on the $200 billion worth of goods that include products from Apple. A tariff is basically a tax on goods entering the U.S. from around the world.
The Cupertino, California-based company didn’t provide specific price details or confirm that it would raise them as a result of the possible tariffs. But Avi Greengart, research director for consumer platforms and devices at market research firm GlobalData, theorized that a price increase could be as high as 10 percent.
How would that affect a device such as the Apple Watch? A low-end model from the Series 3 line is $329, according to Apple’s website. With a 10 percent price jump, you’d be looking at an extra $32.90 if Apple decided to pass the higher costs along to consumers. For AirPods, the current $159 price tag would rise another $15.90.
“Apple would not want to pass along a 25 percent price increase on an Apple Watch,” Greengart said. “That may impact demand too much, and they would try to almost split the difference and see how much of the loss they can take and how much the consumer’s willing to bear.”
The hit to consumers wallets, however, could be far more substantial, counters Angelo Zino, senior equity analyst at CFRA, a Wall Street research firm. Zino estimates the average selling price of products Apple says will be impacted by tariffs would rise “at least
10 to 20 percent.”
At least one Wall Street pro believes Apple, which last month became the first U.S. publicly traded company to achieve a market value of $1 trillion, will eat the costs. Gene Munster, analyst and investor with Loup Ventures, thinks Apple would likely absorb any extra costs and not raise prices.
Still, a price increase could fall somewhere between nothing and 20 percent. Tom Forte, an analyst at D.A. Davidson, thinks the potential price increase for the devices Apple said are at risk from tariffs could start as low as
5 percent and go as high as 9 percent. Apple shares, which are up 30 percent this year, fell 1.3 percent Monday.
Apple could not immediately be reached for comment.