Donald Trump has announced tariffs that will end up skyrocketing the price of a boatload of Apple products because the regions where those levies have been applied are where the Cupertino giant’s production hubs are present. During the announcement at a White House event, Trump stated that the tariffs would reach up to a whopping 46 percent. It appears that Apple’s pledge to invest $500 billion in the U.S. did not have the intended effect, and consumers in the country will have to pay dearly with their wallets.
The very reason Apple wanted to diversify outside of China has been discouraged, thanks to Trump’s latest announcement
A base rate of 10 percent tariffs on all imports to the U.S. will come into effect on April 5, which will have a sufficient impact on the consumer’s purchasing power. Additionally, the Trump administration will also introduce what it calls ‘reciprocal tariffs’ on select countries where U.S. exports are available at increased prices due to international governments. These specific changes will go into effect from April 9. Some of the other levies have been applied to regions that hold significant trade value for Apple.
Despite the California-based giant’s incessant efforts to diversify out of China, the latter remains one of the most important manufacturing locations for the company’s iPhones. With the new tariffs in place, which include a 34 percent reciprocal tariff announced today, plus a 20 percent levy introduced in January, could see various products imported to the U.S. at a substantially higher sum. Furthermore, the reason for expanding out of China will now be discouraged by Apple as these too, have been hit with tariffs.
For instance, Vietnam and India would be subject to 46 percent and 26 percent levies, respectively. Malaysia will have to deal with tariffs as high as 24 percent, with other countries that were never subjected to these measures now having to deal with at least a 10 percent tariff. These changes would have a deleterious impact on Apple’s business as it would bump the production cost of its products, eating into its margins. In any outcome, the company faces a lose-lose situation.
However, 9to5Mac reports that there is a possibility that Trump will introduce exceptions to these tariffs and alleviate some of the pressure on these regions, particularly those that hold paramount importance for Apple. Unfortunately, inflicting pain on China appears to be a target for the U.S., so the aforementioned tariffs might remain in place.
News Source: CNBC
