On Friday, the USA UU They raised import taxes to 25 percent on Chinese products worth billions of dollars, marking the latest escalation in a growing trade war that has lasted for more than a year. When tariffs were initially announced, many saw them as a negotiating tactic, designed to put pressure on ongoing trade negotiations between President Trump and Chinese President Xi Jinping. But with Trump now in Washington and encouraging the new taxes on Twitter, it seems clear that the 25 percent tax will be in effect for a while.
China has already retaliated with additional tariffs on US imports into China worth $ 60 billion, including chemicals and frozen products, which increases the real danger of further escalation from the United States.
US hardware companies UU They largely depend on trans-Pacific trade, but so far, tariffs have avoided most assembled computers and smartphones, instead focusing on unbundled components that are likely to have less effect on final consumers. But that does not mean that technology companies are not completely affected. In September, Apple sent a letter to the US Trade Representative. UU In which he described exactly how they would be affected by the proposed rates and begging for changes before the final codes were implemented. Some high-profile categories on the list were finally exempted, including the AirPods code and the Apple Watch.
But the codes involved in the "adapters, chargers, cables and cords" of Apple remained on the list and, since last September, they were charged a tax of 10 percent when they entered the US. UU From China. The same goes for iPhone cases and iPad leather cases, which are also subject to the fee, according to Apple's letter. On Friday, that jumped to 25 percent. (Apple declined to comment when The Verge .)
So far, that cost has been borne entirely by Apple and its suppliers. The prices listed on Apple's website have not been moved since the rates went into effect. With $ 70 for a charger (which would cost you as little as $ 11 in other circumstances), Apple's margins may be large enough that they can simply eat the additional cost. It is also possible that Apple's Chinese manufacturing partners were willing to offer a slight discount in light of the rates. It could even be that, since September, Apple has been able to change its supply chain enough to completely avoid the impact of the tariff. But given Apple's massive scale and intense quality demands, such a move could have been more costly than just paying the fee.
It's likely that none of this means a lot to Apple's bottom line. Chargers and phone cases are not a big part of the company's business, and with almost $ 20 billion in profits in the last quarter, a slight increase in costs is not the most terrible thing you face. But as Trump and China are still trapped in the rules of commerce, it's easy to imagine the next escalation that brings AirPods and Apple Watches back into the mix, not to mention iPhones and MacBooks. If that happens, things could get bleak for Apple, and even more expensive for their customers.