Apple: Trump’s China tariffs are going to hurt the company
U.S. President Donald Trump’s proposed tariffs on China cover various Apple products, the tech giant said in a letter to the U.S. trade representative, pulling the nation’s largest tech company squarely in the crosshairs of ongoing trade tensions.
Trump’s proposed tariffs on $200 billion worth of Chinese goods would affect the Apple Watch, AirPods and Apple Pencil, the company said in the letter. It would also hit the HomePod, Mac Mini, and adapters, and chargers for a host of products. As a result, consumers will have to pay more for Apple products, the company said.
In theory, Apple’s impressive margins, profit and cash flow could let it absorb some of the increased cost. Last quarter, the company earned $11.5 billion on sales of $53.3 billion, and reported more than $243 billion in cash and equivalents. It is the most valuable publicly traded company in the world with a market cap that surpassed $1 trillion in early August. The company posts annual revenue north of $200 billion and has pulled in more money than Wall Street has expected for 21 of the last 22 quarters.
In its letter, Apple did not offer an estimate of how much the tariffs would increase its costs.
“It is difficult to see how tariffs that hurt U.S. companies and U.S. consumers will advance the Government’s objectives with respect to China’s technology policies,” Apple said in the letter. “We hope, instead, that you will reconsider these measures and work to find other, more effective solutions that leave the U.S. economy and U.S. consumer stronger and healthier than ever before.”
Bloomberg first reported the letter.
Apple CEO Tim Cook had previously brushed off tariff concerns, saying he’d had conversations with Trump about the tariffs and that he was confident tariffs wouldn’t hit the iPhone. The device drives most of Apple’s profits, and it was not listed as one of the products that would be affected by the tariffs.
The U.S. trade representative’s public notice and comment period for the proposed additional tariffs ended Thursday, White House spokesperson Lindsay Walters said in a statement to CNBC.
“USTR is conducting a thorough review of public submissions. However, potential scenarios like this only further reinforce the importance of how getting China to play by the rules and fix their unfair practices will be good for the US and global economy,” Walters said.
Apple shares closed down nearly 1 percent Friday, after gaining as much as 1 percent earlier in the session. Shares of Apple suppliers were mixed with Qualcomm closing up slightly, while Skyworks fell 1.3 percent and Cirrus Logic declined 2.3 percent.
Source: CNBC
