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Home / Business / Apple is asking the United States for a tax exemption on Apple Watch, AirPods and more

Apple is asking the United States for a tax exemption on Apple Watch, AirPods and more



Prior to September 1, Apple was barely exposed to the Trump administration's import tax on products imported to the United States from China. Some cases for iPhone and iPad were charged because, like most Apple products, they are designed in the US, but overall in China. The United States has traditionally had a large trade deficit with China because US consumers have more disposable income than their Chinese counterparts, and can afford to buy a greater amount of goods from China than consumers buy from the states. But US President Donald Trump equates such a loss to "losing", although most economists disagree.

In an effort to bring down the deficit, Trump began a trade war with China, announcing that the United States would impose tariffs on goods imported from China. The president was trying to make it look like the tariffs have forced China to pay millions of dollars to the U.S. Treasury when he once tweeted. But that is simply not true. Tariffs are an import tax paid by US companies. Companies, like Apple, can pay all, some or none of the taxes and pass the balance on to consumers by raising prices. Apple decided to "eat" the cost of the tax on the aforementioned cases, so that their retail prices would remain the same.

Two of Apple's red hot portable watches are being siphoned off with a 1
5% import tax

Bloomberg reports today that Apple has filed with the US Trade Representative's office for 15% tariff waivers charged for 11 Apple products, including:
  • Apple Watch
  • AirPods / Beats wireless earbuds and chargers
  • iPhone parts including battery and smart battery case
  • iMac, Mac Pro storage, MacBook battery
  • Beats Pill + wireless speaker [19659010] Apple says in the filing that it cannot find a source outside China but can provide it with the parts it needs for the coming year. The decision to waive the tariff for Chinese imports is based on whether the product can be obtained from other countries or whether it is considered important for Chinese industrial production. Also taken into account is whether the tariffs will cause "serious financial harm" to the company (in this case Apple) or the United States Last year, Apple sought relief from the 25% duty rates that were intended to be charged for 15 components of the MacBook Pro. The company was denied relief on five of the components, but failed to pay the import duty on ten of them. Last month, Apple announced that it would manufacture Mac Pro computers at a plant in Austin, Texas that it has owned since 2013.

    The Trump administration also planned to tax smartphones imported from China on September 1st. But to prevent prices from rising during the Christmas holidays, the 10% tariffs for some consumer products, including smartphones, will start on December 15th.

    Previously, President Trump has warned Apple that the only way for the iPhone to avoid being hit by tariffs was to move production of the device to the states. Apple responded by and tried to explain to the president how the tariffs really work. And while Apple has been thinking of moving some of its iPhone production out of China, countries like India or Vietnam are likely to be the recipients of such a move. The company already produces a limited number of iPhones in India for the domestic market.


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