Some iPhone accessories have been hit with an import tax; Apple's actions hid it from consumers

Some iPhone accessories have been hit with an import tax; Apple's actions hid it from consumers
As we've pointed out, the trade war between the United States and China has not yet touched the Apple iPhone or other Apple devices. On Friday, the U.S. raised the tax on $250 billion worth of Chinese imports; China retaliated today by adding tariffs on $60 billion of U.S. imports. So far, Apple doesn't have to decide whether to protect its margins by raising the price of the iPhone in the states. Morgan Stanley analyst Katy Huberty recently suggested that if a 25% tariff is imposed on Apple's smartphones, the price of the iPhone XR would rise by $160.  Don't be fooled by tweets sent out by President Donald Trump. China does not pay the U.S. any money because of the tariffs. Actually, the additional tax is paid by American importers and consumers.

While no Apple devices are currently the subject of these tariffs, according to The Verge, accessories like adapters, chargers, cables and cords h taave been taxed at 10% since September. Now, the import taxes on these accessories go up to 25%. Besides those accessories, the very same thing applies to Apple's iPhone cases and the leather cases for Apple's iPad tablets. Apple has eaten the cost of the additional taxes on these accessories measning that U.S. consumers saw no hike in the prices of these items. But we can't expect the company to do this forever.

Back in September, Apple sent a letter to the U.S. Trade Representative stating that the tariffs-merely proposed at the time-would lead to import taxes on the Apple Watch, HomePod, AirPods and Apple Pencil. The final list of products eligible for the tariffs did not include the aforementioned products although adapters, chargers, cables and cords remained on that list.

You might be asking yourself, isn't Apple an American company? Why should its products be subject to an import tax?


Yes, Apple is an American company and if you're wondering why its accessories are lumped in with a group of products imported from China, the answer is quite simple. While Apple designs these items in the U.S., it has them assembled in China. President Trump has often told Apple and other U.S. companies that if they want to avoid tariffs, they need to move their production to the states. Apple CEO Tim Cook, who has had the opportunity to speak with the president several times, has warned Trump that a trade war with China is not a good idea. At one of those meetings, Cook was reportedly promised by the president that the U.S. government would not impose tariffs on the iPhone, although others in the administration denied that the promise was ever made.

Some Apple iPhone accessories, like cases, adapters, chargers, cables and cords are being taxed at 25%

Some Apple iPhone accessories, like cases, adapters, chargers, cables and cords are being taxed at 25%


So why are the U.S. and China embroiled in this trade war? It all goes back to the trade deficit. For decades, the value of Chinese goods imported into the states has exceeded the value of American products imported into China. The is due to a couple of things; one, U.S. consumers have more money to spend on imports than their Chinese counterparts. And two, the cost of assembling products in China is a lot cheaper than it is in the U.S. The president sees this as some kind of scoreboard that in his opinion, shows the U.S. losing to China. The U.S. and China have been unable to come to an agreement on trade.

The other side of the trade war is that it weakens the Chinese economy. From December through March, Apple averaged a 66% decline in iPhone shipments each of those months. In April, the decline was narrowed sharply to 3%, indicating a possible turnaround for Apple in the country. Overall phone shipments in China rose 6% in April after declining in 9 out of the previous 10 months.

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9 Comments

1. Gazmaticc

Posts: 9; Member since: May 05, 2018

Apple is an Irish company. So if they do t want to pay import taxes they should make their products in America

2. vgking9699

Posts: 84; Member since: Mar 01, 2019

There’s no companies in America that could possibly keep up with apples product sales plus Americans have to get paid more money than those in China

7. oldskool50

Posts: 447; Member since: Mar 29, 2019

Really? Intel sells over 500M processors every year. many of them are made in Asian countries. Most I am sure are made in China. Let's assume CPU's are on that list. Intel who already has a 500-1000% markup on CPU's, if they get tariffs they are gonna increase processor costs on consumers and OEM's. Which means PC's will also cost more money. Guess where Dell and HP ship most of their products from...CHINA. What people don't understand, is this doesn't just effect Apple. It effects the US in almost every product category. Just imagine what happens if clothing is on the list. Stop acting like Apple is the only one who is gonna be effected by this. and your claim that no other US company sells more product vs Apple, you have zero idea what you are taking about. Qualcomm is US company, so is Intel, so is Microsoft, so is Dell. all of these companies ship far and away more products vs Apple NONE of Apple products are made here. At least some of the companies I mentioned do make a few things on the US. But on;y really cheap things. Apple is the least of our worries. Now one thing I do agree with Trump, if we force all of them to bring manufacturing back to the US, then competition on the same continent at least, would actually force prices right back down. They will save money in other ways. For example, even though it will cost more to pay an employee, they will save money because shipping will be cheaper. Companies who have factories both big an small, could assemble many products for cheap cost. It just won't be as cheap as China. They can make their crap in Mexico, like many car companies do. Then they wouldn't have to pay those. Those peopel need jobs. if they had good jobs, they wouldn't need to come here. Because Mexicans are willing to work jobs, AMERICANS are to proud to do. These are the jobs immigrants are stealing. You don't have to steal something that is given to you because no one else wants it. But certain people here want you to think someone else is the problem, when the fact is; it them who are the problem. The problem with the US and the rest of the world, are because of people like Donald trump. In every way possible you can think of, people like him are the disease of this planet.

3. rossy

Posts: 16; Member since: Aug 23, 2013

Alan, there you go again with half truths. Did not see you mention Chinese government's forced technology transfers, intellectual property theft, limits on domestic company ownership, subsidies of government owned companies to the tune of many tens of billion of dollars. The latter created oversupply of metals and put American companies out of business. I guess that is Trump's fault. He should have ignored the problem like all his predecessors. Again, stick to technical articles where your hate for Trump would not show.

4. notfair

Posts: 683; Member since: Jan 30, 2017

We have a vicious supporter here.. go bud, tell'em.

8. jacky899

Posts: 357; Member since: May 16, 2017

The whole trade deficit and "score board" justification is dishonest US government propaganda. What they don't tell you is a large majority of these products exported from China are Western brand products, mainly American such as, Apple, Nike, Starbucks coffee, Cisco, Dell, HP, Vizio, Intel etc., where 98% of the profits go back to the US. For example, only about 3% to 6% of the manufacturing cost of iphones goes to China. The rest are component cost that goes to Korea, Japan, etc. The Iphone 7 cost $5 to manufacture in China per ZDNET and $8 from other sources for more recent iterations. However, the 100% cost is calculated into the trade deficit "score board" instead of the small amount that actually goes to China. On the other hand, besides dollar store bargain bin products, have you seen any main stream, profitable Chinese brand products selling here? The only major ones would have been Huawei and ZTE, which got shot down by the protectionistic US government just like many other Chinese companies who have tried in the past. Another thing the Trump administration hides from you is how much money goes from China to the US. E.g., 1/3 of the world's Iphone users are in China.https://qz.com/687017/its-official-china-is-the-largest-iphone-market-in-the-world/https://www.scmp.com/tech/enterprises/article/2131811/apples-china-sales-grow-second-straight-quarter-strong-iphone On the contrary, if you go to China, you will see the presence of American and western corporations are far more prevalent than you see Chinese presence in the US (E.G., McDonalds and KFC are the #1 and #2 restaurant franchise in China and you find one in almost every single city block). American brands/companies that dominate the Chinese market in the $billions including Nike, New Balance, Tesla, Apple, General Motors, Coach, Starbucks, Microsoft, KFC, McDonalds, Subway, Wendy's, Gillette, Coca Cola, Pepsi, Adidas, Intel, AMD, Nvidia, Walmart, etc. etc. and the Chinese are perfectly content with the situation. Just imagine if it was the other way around where profitable Chinese presence dominated US cities and way of life

5. TBomb

Posts: 1102; Member since: Dec 28, 2012

That 2nd paragraph doe....

6. oldskool50

Posts: 447; Member since: Mar 29, 2019

"At one of those meetings, Cook was reportedly promised by the president that the U.S. government would not impose tariffs on the iPhone, although others in the administration denied that the promise was ever made." Well it's a fact! Because even in your own article it states, that the taxes have been applied to everything else, and other products Apple make will be on it too. According to the new tariff's Donald Duck did, any device that can receive or transmit data, is subject to this tariff. so, doesn't the iPad and iPad send and transmit data? Now this is just one of the categories for a tariff, it's not the only one. I picked this one, because basically any an all electronics that are imported from China, will all be hit with a 25% tax which yes factually import taxes are paid by the importer, the money does not go to the US Treasury; which is Donald's lie to get peopel to think we are missing out on money, when in fact we are about to pay even more money. This is gonna hurt Wal-Mart, who 80's of the products they sell are made in China. Samsung also makes phone sin China, usually the ones that are used in China, but some also come to the US. Samsung could decide to make all their phones in Korea, where they already know how much they pay in these taxes. But the problem is, it costs more to ship to the US from Korea vs China. The only benefit the US Treasury gets from this is. These corps will raise prices on good imported from China on US Consumers. This will will increase retail prices, which results in higher sales taxes being paid. So if sales tax in your city is 11%, now you gonna pay 11% on a product that could cost $160 more. Costco and all these other stores that sell TV's and stuff, are gonna see price increases from OEM's like Samsung and Vizio and others. That means WE ARE GONNA BE PAYING THE MAJORITY. And even though Apple can surely afford to absorb most of it, they won't for long because no one else will either. If an iPhone was made in the US, it would cost more. But not $1000 more. It would cost more, because apple would have to pay workers $15hr, plus benefits. Then they would need 3 shifts, because you can't work a single worker 24 hours a day 7 days a week like you can in China. Then they have to actually build factories and since Chinese steel will have huge tarriff's, they will be forced to buy US steel which is more expensive for similar reasons. Trump is a completely stupid moron and everyone who voted for him is too. This is why you should vote for a person solely on the color of their skin. You end up with Putin in a clown costume.

9. NarutoKage14

Posts: 1296; Member since: Aug 31, 2016

This article has started a war against proper spelling. You guys really need to hire an editor.

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