Apple has warned that popular products like the Apple Watch, HomePod and AirPods could face price increases in the US because of tariffs placed on China by President Trump.
The firm says, ultimately, be American consumers who will pay the price for the proposed $200 billion levied goods imported from China. Although Apple products are designed in the United States, they’re largely built in, and imported from China.
Now, in a letter to US Trade Representatives, the company has defended its tax contributions and hinted it won’t be the ones taking the hit as a result of any additional tariffs.
“Apple is the largest U.S. corporate taxpayer to the US Treasury and pays billions more each year in local property, sales and employee taxes,” Apple writes in the letter (via SlashGear).
“Our concern with these tariffs is that the US will be the hardest hit, and that will result in lower U.S. growth and competitiveness and higher prices for US consumers.”
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Apple also says Beats headphones along with the AirPort, Time Capsule, Magic Mouse/Trackpad and Apple Pencil prices could also go up, along with the Mac Mini – which is reportedly due a refresh. A large range of accessories like dongles, cases, chargers and cables would also be hit by the levy.
Many Apple fans might be asking why the world’s most valuable company couldn’t sacrifice a little profit in the short term, rather than passing the cost onto consumers. Apple’s bean counters, of which the current CEO was once chief, would probably argue that sort of attitude doesn’t get a company to a $1 trillion market cap.
Whether customers, already faced with handing over more than $1,000 for the 2018 iPhones, will see things the same way remains to be seen. Given many have already baulked at the prospect of handing over $330 for the half-baked HomePod speaker, it’s unlikely they’d abide by any tariff induced price hike.
Fundamentally, Apple disagrees the tariffs will do any good anyway. In the letter it added: “It is difficult to see how tariffs that hurt US companies and US consumers will advance the Government’s objectives with respect to China’s technology policies.” In the process, it highlighted the $50+ billion it spends with its US suppliers last year, and the fact that the majority of its direct employees are based in the country.”
In a statement, a US Trade Representative spokesperson said these potential scenarios “only 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.”
In the meantime, it looks like Trump’s policies will be costing Apple consumers, and not Apple shareholders, more money.
Should Apple suck it up and take the hit? Or is it within its rights to pass the costa onto the consumer? Drop us a line @TrustedReviews on Twitter.