Trump’s China deal may stop Apple hiking prices of iPhones and iPads

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Trump’s China deal may stop Apple hiking prices of iPhones and iPads
That's good news for Apple and its customers.
Photo: White House

Apple has been given a welcome reprieve on tariffs for the iPhone, iPad and Mac after President Donald Trump agreed to a limited trade deal with China on Thursday.

The phase one agreement means rolling back existing tariff rates on Chinese goods and canceling new tariff rates that would have gone into effect Sunday.

The first round of tariffs went into effect in September. They meant that various products, including some Apple devices, were taxed at 15% upon entering the United States.

According to The Wall Street Journal:

“The deal calls for China to buy $50 billion worth of agricultural goods in 2020, along with energy and other goods. In exchange the U.S. [will] reduce the tariff rate on many Chinese imports, which now ranges from 15% to 25%.”

The deal will be canceled should Beijing fail to make the required purchases. This would result in restoration of the original tariff rates. The United States reportedly will announce tariff rate cuts on Friday.

Trump’s China deal: Not quite a done deal yet

This is only the start of a broader deal with China. It does not address larger issues, such as subsidies or Chinese pressure on American companies to share technology. The WSJ says “many in the U.S. business community remain skeptical that discussions on phase two or phase three deals will bear fruit.”

Nonetheless, the new deal undoubtedly will please Apple. The company has been working hard to influence the president when it comes to tariffs. Apple manufactures many of its devices in China, meaning that it will bear the brunt of new tariffs. Recently, Apple hired a pro-Trump lobbyist to work on its behalf to help the company avoid tariffs. Cook also launched a “charm offensive” on Trump to try and score a favorable deal.

I highly doubt this is the last we’ll hear of China tariffs. Still, for the meantime it’s a welcome early holiday gift for Apple. And for any customers who might have otherwise had the costs passed on to them. One recent report claimed that the iPhone could have gotten $150 more expensive as a result.