New China tariffs could cost average U.S. household $1,000 per year

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Apple could be a $2 trillion company by end of 2021
Apple hasn't yet revealed if it's ramping up prices.
Photo: Ste Smith/Cult of Mac

New tariffs on imported Chinese products in the escalating U.S. vs. China trade war could cost the average household $1,000 per year, J.P. Morgan Chase claims.

The first round of tariffs went into effect Sunday at 12:01 a.m. They mean that various products, including some Apple devices, are taxed at 15% upon entering the U.S.

Apple products affected by the new tariffs include Apple Watch and Watch bands, AirPods, HomePod, iMac, and certain Beats products.

Tariffs on a second wave of products, including the iPhone, iPad, MacBook and more, will come into effect in December. The current plan is for these delayed tariffs to begin December 15.

What will this mean for Apple prices?

A number of analysts have said that tariffs will cause Apple to ramp up its prices. HSBC previously said that the cost of an iPhone could increase by $160 in the event of tariffs. J.P. Morgan, meanwhile, also suggested that tariffs could increase prices by around 14% or more.

It’s not yet clear what Apple will do. According to reliable Apple analyst Ming-Chi Kuo, Apple will absorb the cost of any tariffs, rather than pass them on to customers. While that may be a good decision in the short-term, if the trade war is not resolved Apple will have to ramp up prices sooner or later. Otherwise it will just be throwing money away, which shareholders surely won’t be happy about.