Apple says incoming China tariffs would be disastrous for business

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Apple has recently said that the Trump administration’s tariffs could lower the company’s economic output and put it at a disadvantage compared to its international competitors, particularly its Chinese counterparts.

In Apple’s letter to US Trade Representative Robert Lighthizer, the company argues that the proposed tariffs, which would impact nearly every Apple device including the iPhone, MacBook, AirPods, and Apple Watch, would hurt Apple’s US employees and its ability to contribute to the US economy.

Up until now, Apple has more or less skirted around the Trump administration’s tariffs, despite its heavy reliance on Chinese manufacturing. Earlier rounds of China tariffs had avoided Apple’s highest volume devices, like the iPhone and Apple Watch, but did have its adapters, chargers, cables, and cords affected.

In May, the Trump administration announced a massive expansion of those tariffs, levying a 25 percent tariff on nearly every category of goods that had been previously unaffected, including computers, smartphones, and televisions. The Office of the US Trade Representative is currently seeking comment on those tariffs, which is why Apple wrote this letter.

If the tariffs go into effect, companies like Apple don’t have many options to avoid them. One option would be to move their production out of China, which Apple is reportedly exploring. 

Nikkei reported yesterday that Apple is looking to move to other South East Asian countries, like India and Vietnam. Apart from shifting the production location, companies would either have to raise prices on their goods, which wouldn’t be great for consumers, or absorb the cost of the tariff, which would reduce profit.

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