Yesterday, President Trump announced the imposition of 10% tariff on additional imported goods worth $300 billion from China effective September 1, 2019, sending AAPL stocks tumbling 2.16% on fears of rising Apple product prices and dragging down sales in the US.
Tariffs announced may cover the hardware including new iPhone and other devices that come from China. To circumvent the situation and provide affordable products to American consumers at large, Apple has been moving out production from China to Taiwan, Korea, India, and Vietnam.
Earlier 25% Tariff and Now 10% Will Hit Hard Product Prices, Fears Apple
Already the 25% tariff worth $250 billion on imported goods and mostly retail products like baby products, electronics, and cellphones included were imposed on imports from China and the US importers paid for them. But, actually, American finally ended up spending the tab as importers were all paying up in Dollars!
Now with the new 10% tariff on Chinese goods imports from September 1, 2019, it is feared that Americans will end up paying more for costly Apple iPhones, MacBook, AirPods, IPads, Apple TV, keyboards, batteries, monitors, and other Apple products originating from there.
Apple Communicated Its Fears & Opposition of Tariff Imposition on Chinese Imports
During the previous round of tariff imposition by Trump at 25%, Apple, through a communication addressed to Mr. Robert Lighthizer, the US Trade Representative, had strongly objected to the tariffs imposed on Chinese imports. The communication outlined Apple’s concerns about the impact on its product prices and reduced Apple’s US economic contribution.
Apple in the letter claimed investments worth $350 billion in the United States and providing for over 2 million jobs across 50 US states ending up ratcheting patriotic fervor and emotive appeal simultaneously.
While US Retail and growing number of US Corporates have expressed against such moves on trade with China as companies like Apple have a lot at stake, at this juncture.
Apple Top & Bottom Lines Rest on Effects of Chinese Import Tariffs
September is crucial for Apple as it will be for Americans. For Apple, the traditional launch season of new iPhones will be followed by a slew of products and services announced by the Cupertino giant.
Whether the new tariffs overshadow the company’s financials for remaining 2019 and 2020 periods can only be figured out, when the final bucks (margins) get announced at the Fiscal Q4 2019 and H2 2019 end.
Till the final figures are out, industry and analysts will keep eyes on political as well as economic moves of both – China and the US. One only hopes that the US consumers get their goods priced right, be it Apple iPhone, or any other coming from China that it matters!