Apple says new China tariffs will make Apple Watch, AirPods costlier

Trump: Apple could be tax free if it makes products in the US

Trump: Apple could be tax free if it makes products in the US

According to Bank of America Merrill Lynch, if Apple shifted production to the U.S.to avoid new tariffs, as Trump proposed on Twitter, U.S. consumers could be paying 20% more for their devices.

Trump touted the decision with a weekend tweet, noting that the auto "can now be BUILT IN THE U.S.A".

USA businesses say higher American wages will offset the benefits they gain by avoiding tariffs affecting their imports from China.

In a letter to the Office of United States Trade Representative, Apple said the Apple Watch, Apple Pencil, Air Pods, and leather cases for the iPhone would be affected by Trump's proposed tariffs.

China's growing e-bike industry faces duties not only from the U.S. but also the European Union, which slapped provisional anti-dumping tariffs of 22 to 84% on Chinese-made e-bikes in July, alleging Chinese companies benefited from cut-rate aluminium and other state subsidies.

Dell, Cisco, Juniper Networks and Hewlett Packard said the tariffs would increase the costs of their networking equipment, damaging the companies' bottom lines and leading to possible USA job losses. It makes many of its products for the USA market in China.

"Our concern with these tariffs is that the USA will be hardest hit, and that will result in lower U.S. growth and competitiveness and higher prices for United States consumers", Apple said in its letter.


China matched Washington's first round of tariff hikes on $50bn of its goods, but their lopsided trade balance means Beijing is running out of imports for retaliation.

"There is an easy solution where there would be ZERO tax, and indeed a tax incentive".

The market share of U.S. brands fell to 10.7 percent in the first eight months of 2018 from 12.2 percent a year earlier, according to the China Association of Automobile Manufacturers. The US on July 6 began imposing a 25 % tax on $34 billion in Chinese language imports, including motorized autos. China's trade surplus with the United States widened to a record in August.

The threatened tariffs would add to the $50 billion in imports already targeted and mark a major step up in the long-running battle between the world's top two economies. He said Japan will have a "big problem" if it doesn't conclude a new trade deal with the U.S. But Trump has been unapologetic, insisting that his tough trade tactics will work. He then asked it to "start building new plants now".

In China, labor costs for motor vehicle and parts manufacturing are about $8 per hour including benefits, but it's more than $52 per hour in the US, according to Dziczek. The tariffs would pressure China to stop that behavior, the administration has said. "We hope, instead, that you will reconsider these measures and work to find other, more effective solutions that leave the USA economy and USA consumer stronger and healthier than ever before", Apple said.

There was some relief earlier Friday that Trump did not immediately impose levies on $200 billion of Chinese goods after the passing of a deadline for a public consultation.

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