Active Stocks
Wed May 22 2024 15:59:56
  1. Tata Steel share price
  2. 173.30 -0.57%
  1. ITC share price
  2. 439.75 1.10%
  1. State Bank Of India share price
  2. 819.30 -1.35%
  1. NTPC share price
  2. 373.40 0.40%
  1. Kotak Mahindra Bank share price
  2. 1,700.40 0.19%
Business News/ Companies / News/  US-China trade war will hit Apple for real this weekend
BackBack

US-China trade war will hit Apple for real this weekend

President Donald Trump’s 15% tariffs on Chinese goods were entered into the Federal Register on Friday, making the move official
  • Here’s a list of Apple products that will be hit by 15% US tariffs on Chinese goods starting this weekend
  • Apple looked unlikely on Friday as Trump showed little sign of backing down (AFP)Premium
    Apple looked unlikely on Friday as Trump showed little sign of backing down (AFP)

    The trade war between the US and China will hit Apple Inc. this weekend, dragging the largest US technology company into a fracas that threatens to raise prices on popular consumer gadgets and undermine a giant but delicate global supply chain.

    President Donald Trump’s 15% China tariffs were entered into the Federal Register on Friday, making the move official. At 12.01 a.m. local time on Sunday in Washington, the levies will kick in for hundreds of products entering the US or being withdrawn from warehouses for consumption in the US, according to the order.

    One veteran analyst was holding out hope for a last-minute reprieve.

    “The US adding tariffs to any Apple product without some type of corresponding offset to mitigate the negative effects crosses the Rubicon on many dimensions," Gene Munster of Loup Ventures, wrote in a note on Friday. “We believe the US does not want to be the first to add tariffs to Apple, given Apple is arguably the leading US company and the face of American business in China. The optics of a US protectionist first approach penalizing a US global leading company while China doesn’t penalize Apple would seem to surrender the moral high ground."

    Any reprieve for Apple looked unlikely on Friday as Trump showed little sign of backing down and blamed US companies for their inability to deal with a trade policy he said was aimed at reining in “unfair players." Apple didn’t respond to requests for comment.

    Here’s a list of Apple products that will be hit by 15% tariffs starting this weekend:

    • Apple Watch and Watch bands
    • AirPods
    • HomePod
    • Some Beats headphones
    • IMac computers
    • Repair parts for iPhones may also be hit
    • Nand flash, a key storage component for iPhones, could also be affected


    The iPhone, which contributes more than half of Apple’s revenue, won’t face this 15% tariff until December 15. But the other hardware products made up at least 10% of sales in the company’s 2018 fiscal year, and many of these will have to absorb the 15% import levy that kicks in on Sunday.

    It’s unclear if Apple will raise product prices or assume the cost of the tariffs. The company, one of the world’s most profitable, maintains higher margins than most other consumer hardware makers.

    A 15% tariff on Apple wearable gadgets sold in the US would likely reduce earnings by 5 cents to 10 cents a share per year, Munster estimated on Friday. Analysts, on average, estimate Apple’s adjusted profit will be $11.63 a share in the 2019 fiscal year, according to data compiled by Bloomberg.

    Apple has been lobbying Trump for more than a year to avoid tariffs. During a recent dinner with the president at his golf club in Bedminster, New Jersey, Chief Executive Officer Tim Cook voiced concerns that Apple’s main rival Samsung Electronics Co. will get an edge because its products won’t be subject to the levies.

    Just days after that dinner, Trump announced that tariffs on $300 billion of goods from China would be 15%, up from 10%. These take effect in two tranches, which the first batch happening Sept. 1.

    Apple spent decades building one of the largest supply chains in the world. The company designs and sells most of its products in the US, but imports them from China after assembly. That makes it one of the most exposed companies to tariffs.



    You are on Mint! India's #1 news destination (Source: Press Gazette). To learn more about our business coverage and market insights Click Here!

    This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

    Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
    More Less
    Published: 31 Aug 2019, 10:49 AM IST
    Next Story footLogo
    Recommended For You