Trump's tweets mean that you'll soon pay more for a new Apple iPhone in the states

Trump's tweets mean that you'll soon pay more for a new Apple iPhone in the states
Bad news for Apple and those who buy the iPhone in the U.S. appeared in a series of tweets sent this afternoon by President Donald Trump. In the tweets, Trump said that starting on September 1st, a 10% tariff will be imposed on another $300 billion of Chinese imports including the iPhone. The tariffs are a tax paid by U.S. corporations on products imported from China. Apple, like other American firms impacted by the tariffs, can decide to eat the entire cost of the tax or pass it on to U.S. consumers in the form of higher prices.

This is also bad news for Huawei. Back in May, the company was placed on the U.S. Commerce Department's Entity List for security reasons, preventing it from sourcing parts from the states. But when a truce in the trade war was announced by President Trump on June 29th, the president said, "U.S. companies can sell their equipment to Huawei. We're talking about equipment where there's no great national security problem with it." But confusion has reigned and Huawei still cannot access its U.S. supply chain. And if the company is not being used as a bargaining chip by the U.S. to improve terms of a future trade agreement, Huawei will end up on the Entity List indefinitely.

Trump says that the Chinese have not purchased U.S. agricultural products as promised

According to NBC News, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin returned to Washington after attending U.S.-Chinese trade talks in Shanghai. While Trump characterized the talks as being "constructive," the meetings ended earlier than scheduled indicating that not much progress, if any, was made. The trade war was instigated by the president because of his thoughts on the U.S.-China trade deficit. Many economists say that the deficit indicates that U.S. consumers are better off financially than their Chinese counterparts and can afford to buy their exports. But Trump sees the deficit as numbers on a scoreboard and feels that it means that the U.S. is losing the trade game.

While the Apple iPhone is designed in the U.S., the product is actually assembled in China and shipped to the states. That makes it a Chinese export and subject to the tariff. Some cases for both the iPhone and iPad are already hit with the import tax, and Apple has decided not to pass on the additional costs of the tax to consumers.

Technically, it isn't just the iPhone that is included in the latest tier of Chinese imports. All smartphones imported into the U.S. from China will face the 10% tax as will other consumer electronics products. And no, the Chinese government does not pay one cent to the U.S. because of these tariffs. In fact, U.S. corporations and consumers are the ones most affected by this import tax. So when the cost of your next iPhone purchase goes up another 10%, you'll know the reason why.



1. pogba

Posts: 114; Member since: Jun 13, 2018

While Apple can comfortably afford to eat the tariff, i can't say the same for most of its customers. The sales are already on decline, this will definitely hit even harder.

2. OneLove123

Posts: 1292; Member since: Aug 28, 2018

The iPhone lovers doesn't care about prices. They still have some body parts to sell.

4. User123456789

Posts: 1345; Member since: Feb 22, 2019

Of course this 10% will be passed on to costumers.

5. Dr.Phil

Posts: 2512; Member since: Feb 14, 2011

Except this article fails to mention that Apple has been moving production of the iPhone to India. It was already reported back in April that they were beginning a trial run within weeks. So Apple could potentially avoid the tariffs altogether. In fact, with labor costs in India being 3 times cheaper than Taiwan, Apple could afford to sell the iPhone at an even lower cost than they already have (not that they ever will). And by Apple producing the iPhone in India they avoid a 20% import tax that India has in place.

8. User123456789

Posts: 1345; Member since: Feb 22, 2019

Foxxconn does not make them in Taiwan.

9. Alan01

Posts: 661; Member since: Mar 21, 2012

The number of iPhones that Apple can produce in India is not nearly enough for export. And moving production out of China will take years to accomplish. Regards, Alan

13. Dr.Phil

Posts: 2512; Member since: Feb 14, 2011

They’re already exporting iPhones to Europe from India. At the very least they could have the XR be produced in India to shave costs. Also, you fail to consider the fact that both Bernie Sanders and Elizabeth Warren (two highly popular Democrats running for office) support tariffs on China. So it would seem that this will continue onward whether Trump wins office again or they do. That combined with the latest quarterly reports showing Apple now makes more revenue in services than selling hardware means that Apple will have to eat the costs for the time being until India production ramps up. They can’t afford to sell the iPhone at an increased cost this year because the Pixel 4 and Note 10 are both coming into the scene with arguably innovative pieces of hardware. There are already reports for people to skip this year and go for next year in iPhone upgrades, so they’re already looking at a loss. If they don’t eat the costs then they’ll lose even more market share.

35. mootu

Posts: 1541; Member since: Mar 16, 2017

"They’re already exporting iPhones to Europe from India." Dot any proof of this? Any report i've read says that it's just phones like the iPhone 7 etc coming out of India and they are in quite small numbers. They have to build the supply chain and infrastructure and all this takes years, you have almost zero chance of seeing any of this years models coming out of India.

49. ShaikhJGI

Posts: 361; Member since: Jan 10, 2014

Alan - I am from INDIA & the Apple factory is hardly 35 Kms away from my house. Apple already started producing XR long back & all other low end phones, iPods etc are manufactured here. INDIA factory will start churning out flagships from this month & production will be increased rapidly. What Dr.Phil is mentioning is, this should have been included in the Article.

10. MrMalignance

Posts: 352; Member since: Feb 17, 2013

@Dr.Phil: That may be true, but what are the odds they'll keep eating any additional costs? They can only absorb so much before it becomes an issue. Also how far along is the progress? Assuming that the trial run went well, how long before the pick up production at the established speed they have now?

14. Mike88

Posts: 438; Member since: Mar 05, 2019

It has nothing to do with his fight with China ,, he is a greedy anti American who is against high profile Americans .. many countries in same mission are doing the same by imposing high tax rates on the rich class to work against them with that money. They want to demolish a foundation but they all will fail because now we know

28. raky_b

Posts: 440; Member since: Jul 02, 2014

Don't worry, they will charge all phones sold globally little more, so make more money there and cover losses in american prices staying the same.

11. tedkord

Posts: 17511; Member since: Jun 17, 2009

Apple could, but they won't.

26. raky_b

Posts: 440; Member since: Jul 02, 2014

They can, but why would they!? Because of profits, they did move all production in China, so there is a pattern: they don't care about customers and USA workers, they care about profits. And that was perfectly fine, so long "freedom of markets" was doing good for USA companies, no one had a problem with it. But now when some Chinese brands are getting bigger, taking a share in global economy by more than just charging manufacturing( cheap labour), USA is building walls, protecting their own market. Well...ok, let's all do that. EU should also bring tariffs, charge Google, Apple, Facebook and all others that have business here, but paying taxes in other places)...because, at the end WE ARE those that will pay new price increases in all that technology. Apple won't be adding 10% price increase to online devices sold in US, they will charge rest of us too. And it's not just Apple...

3. User123456789

Posts: 1345; Member since: Feb 22, 2019

Americans have already the cheapest iphones on Earth. No need to complain. Imagine if Apple charged in USA same price of many other markets. With iphones often above $1800, ipad pro of $4000, macbooks that cost more than two or three motorcycles.

15. Mike88

Posts: 438; Member since: Mar 05, 2019

It’ll affect the price in whole world because they don’t sell directly from China. They export their products to other countries from US itself so if Americans will pay more, the whole world will pay more.

36. mootu

Posts: 1541; Member since: Mar 16, 2017

No they don't. iPhones go directly from China to the country where they are destined to be sold. Why would they ship them to the us to then ship them round the world doubling shipping costs, and adding tariffs, that would be just stupid.

6. VariableCheapskate

Posts: 203; Member since: May 29, 2019

lol calm down, your Apple sponsorship status won't be affected, Alan.

7. Alan01

Posts: 661; Member since: Mar 21, 2012

Considering I don't own an iPhone (Pixel 2 XL is my daily driver), your comment is way off the mark. The only iPhone I've owned was the OG model back in 2007. Regards, Alan

12. TBomb

Posts: 1705; Member since: Dec 28, 2012

I guess the theory is have apple take a hit in profit or US consumers take a hit in prices and the demand for the products drops to a low enough level that either a) apple is forced to move out of china ASAP so china gets hit by losing apple's large business or b) apple's production slows and china is still hit. IF Apple is as committed to services as it says it is, then this SHOULD be a non-issue for Apple since hardware isn't as important as it used to be. However, any company would be hit hard with a 10% tariff. Fingers crossed this plan works and we don't all end up screwed for a long time to come.

18. wickedwilly

Posts: 773; Member since: Sep 19, 2018

Hardware is absolutely vital if Apple is to grow its services revenue. The only reason Apple can sell services in this kind of volume is its ecosystem, of which the iPhone is the lynchpin. Take that away and services collapse. Non-Apple users, in general, do not subscribe to Apple Music, for example, there are better options around. The only reason people do, is it fits well with Apples hardware. If large numbers of IOS users continue to switch to Android and iPhone sales continue plummeting in the medium to long term services revenue will decline too.

37. mootu

Posts: 1541; Member since: Mar 16, 2017

" I guess the theory is have apple take a hit in profit or US consumers take a hit in prices and the demand for the products drops to a low enough level that either a) apple is forced to move out of china ASAP so china gets hit by losing apple's large business or b) apple's production slows and china is still hit." That would be a really bad plan then. If every job connected to Apple was lost and all revenue dissapeared it wouldn't even register on the chinese economy. China earns around $8 for every iPhone produced. It's nothing. We are talking economy's here that amount to trillions of dollars. It would hit Apple hard but do nothing to the Chinese.

16. PSAfromThisGuy

Posts: 146; Member since: Jan 16, 2017

dont phase me one bit... they already cost less than $250 to make... apple has you left and right, now the gov't wants a piece of the pie XD XD XD enjoy this news apple fan boys? i thought so

29. raky_b

Posts: 440; Member since: Jul 02, 2014

+10% on that would be $25 more, or 40-50 in case of most expensive devices. Remember that Apple will pay 10% on imports, but full price of a device that customers pay when buying is not just what it cost to produce in China. So on $1000 devices, we are talking about (let say average) 30$ price increase. Why so munch stress around that?

32. User123456789

Posts: 1345; Member since: Feb 22, 2019

10% may be on final price, not factory price.

17. Subie

Posts: 2442; Member since: Aug 01, 2015

Maybe we'll see more cross border shopping in Canada in the near future...

19. Alcyone

Posts: 610; Member since: May 10, 2018

Good idea. That is until someone crosses back and is asked if they have anything to declare. Still gonna get some type of tax on products.

27. Subie

Posts: 2442; Member since: Aug 01, 2015

Yup, because as we all know, no one has EVER crossed the border without declaring all their purchases.

20. oldskool50 unregistered

Well one option would be to lower the cost of the iPhone by 10%, and thus the prices would just stay the same. Apple isn't gonna co tune to eat the cost when they have slumping sales on top of it. Some.of Samsung phones are made in China too. So I expect they will also increase in price. so stupid. Any and all people who voted for him should all have a heart attack. Trump is running US into the ground. What. afeikkin loser. If he doesn't. Are about losing his own .oney, he sure isnt gonna. Re about losing taxpayers dollars of money he doesn't have to work for. Making America great again, when it never was. Now its ne er gonna be great ever.

30. raky_b

Posts: 440; Member since: Jul 02, 2014

You have one dimensional look on all of it. You see, even I that hate US politics, see this as PROTECTION of US businesses. Not just by trying to move production back to USA, but as you wrote...Apple is sales are slumping, and if situation stays as it is it will continue to do long term Huawei, ZTE, Xiaomi and other Chinese brands will fully take over market and nothing will stay for US companies, and no taxes will be paid in US...So Trump needs to kill tax-free global economy as one that exists now(which was made as it is to bring profits to US) and protect it domestic market and country's budget. And don't worry....Apple won't be paying tariffs on full ,$1000 prices....their cost of device produced in China is no more than $400, so even if they pass that to will pa just $1040 for your next iPhone.

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