Tim Cook was reportedly assured that the iPhone wouldn’t been among the items to be hit with an import tariff as part of the United States’ burgeoning trade war with China.
However, according to a new report, it may wind up being hit with two sets of charges: one on iPhones imported from China, and another tax levied in China itself. Ouch!
Smartphones weren’t mentioned in the most recent July list of $34 billion Chinese goods that will be taxed as they enter the U.S. Nor are they included in the $16 billion second batch of products, set to be announced in August, or in a $200 billion round.
However, President Trump is supposedly now threatening to put taxes on a total of $500 billion in imports, which includes virtually everything that is shipped from China to the United States — smartphones included.
As a result, the Wall Street Journal suggests that China may be likely to impose specific taxes on American brands sold in China. As a result of its prominence, Apple could well be among them.
Bad for Apple, bad for its customers
Since Apple has talked about China being its future biggest market, that would be really bad news for the company. Apple has already had to jump through various hoops to remain in China, such as agreeing to move iCloud accounts over to a Chinese company to hold.
But it would also be bad news to customers, since the increased charges would almost certainly be passed on to us consumers. That’s what happened when India introduced new import duties on smartphones, which prompted Apple to immediately raise the price point of the iPhone.
This isn’t the only bit of bad news Apple recently received about possibly being caught up in the U.S. vs. China trade war. Last week, we noted how the Apple Watch could also be among those items subject to new tariffs when they’re imported from China.
Apple has started producing more and more devices in other countries, such as India, but right now the bulk of its manufacturing still takes place in China. With the amount of expertise and quality of facilities in the country, it’s going to be a while before that can change!