Trump's trade war with China should hit Apple this weekend
SAN FRANCISCO: The US-China trade war will hit Apple Inc this weekend, dragging the largest US technology company into a fracas that threatens to raise prices for popular consumer devices and undermine a gigantic but delicate global supply chain.
President Donald Trump's 15% Chinese customs duties were entered into the federal registry on Friday, making it official for the move.
At 12.01 local time on Sunday in Washington, the charges will kick in for hundreds of products entering the United States or being withdrawn from stock for consumption in the United States, according to the order.
A veteran analyst held hope for the last moment of postponement.
"The United States adds tariffs to any Apple product without any kind of offset to mitigate the negative effects of Rubicon crosses many dimensions," Gene Munster of Loup Ventures wrote in a note on Friday.
"We think the US does not want to be the first to impose tariffs on Apple, given Apple is arguably the leading US company and the face of US business in China. The optics of a US protectionist first approach punish an American global leader while China does not punish Apple will appear to surrender to the moral high ground. "
Any exposure to Apple seemed unlikely on Friday when Trump showed little sign of backing and blaming US companies for their inability to handle a trade policy he said was aimed at reinstating" unfair players. "
Apple did not respond to comment requests.
Here is a list of Apple products that will hit 15% rates starting this weekend:
Apple Watch and Watch Band
AirPods
HomePod
Some Beats Headphones
IMac computers
Repair parts for iPhones can also be hit
Nand flash, an important storage component for iPhones, can also be affected
iPhone, which contributes with more than half of Apple's revenue, will not meet this 15 % tariff before December 15.
But the other hardware products made up at least 10% of Read's in the company's fiscal year 2018, and many of them will have to absorb the 15% import duty starting on Sunday.
It is unclear whether Apple will raise product prices or assume tariff costs. The company, which is one of the world's most profitable, maintains higher margins than most other consumer hardware manufacturers.
A 15% tariff on Apple laptops sold in the United States is likely to reduce revenue by 5 cents to 10 cents a year, Munster estimated on Friday.
On average, analysts estimate Apple's adjusted earnings at $ 11.63 per share in fiscal 2019, according to data compiled by Bloomberg.
Apple has been lobbying Trump for more than a year to avoid tariffs.
During a recent dinner with the president at his golf club in Bedminster, New Jersey, CEO Tim Cook expressed concern that Apple's main rival Samsung Electronics Co. will benefit because the products will not be subject to the fees.
Just days after that dinner, Trump announced that the US $ 300 billion goods tariff from China would be 15%, up from 10%. These will take effect in two tranches, the first effort being made on September 1st.
Apple spent decades building one of the largest supply chains in the world. The company designs and sells most of its products in the United States, but imports them from China after assembly. That makes it one of the most vulnerable companies to tariff rates.
