President Obama and President Xi Jinping in Beijing (photo: Agence France-Presse/Getty Images)
A trade agreement reached between the U.S. and China looks set to reduce Apple’s manufacturing costs by removing import tariffs on components imported into the country.
Apple uses components from a number of countries around the world, notably Korea and Japan, which are imported into China for the assembly of iPhones, iPads and Macs. China currently imposes import tariffs on these components. The new deal would allow companies like Apple, Microsoft and HP to bring components into China free from these charges …
The WSJ reports that while the agreement between the two countries needs to be ratified by the remaining 76 member countries of the Information Technology Agreement, agreement between the U.S. and China was seen as the key step.
Tuesday’s agreement between China and the U.S. clears a critical hurdle toward expanding the Information Technology Agreement, whose 78 members account for 97% of IT exports […]
If other member economies approve the pact as expected, the new agreement would boost tech companies in the U.S., Japan and Taiwan, among others. The agreement could cover $1 trillion in trade, according to U.S. estimates.
The ultimate aim of the agreement is to cut costs for consumers, allowing the free passage of both parts and finished products between member countries. The hope is that the agreement will be finalized before the end of the year, and that lower prices will start filtering through to consumers at some point in 2015.
While Apple is course positioned at the premium end of the market, it does cut prices on occasion, such as the $100 drop across the range of MacBook Air models seen earlier this year.
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This will be an interesting change to watch over the next several years. Will Apple drop the prices or simply increase the tech in their phones with the reduced cost of importing the semi-finished goods into the manufacturing facilities within China?
hopefully a mix of both…
You honestly think Apple will drop prices? Somehow, no, I doubt that.
Certainly not in the developed countries that have shown little resistance to Apple’s current pricing. Possibly in the developing countries where Apple is trying to make in-roads and develop new markets.
It will be interesting to watch the play unfold.
No, you’re right. All the price drops that have been happening recently are just a figment of our imaginations.
Did iPhone drop price before? What about Macbook? Mac Mini? iMac? Oh they did.
The prices have dropped? Lol, no. They haven’t.
Uh neither, they’ll just pocket the profit and stash it away. They have over a hundred BILLION dollars cash stowed away. They could have afforded to lower their prices ages ago.
That’s not how you lower the price when you have cash. It’s dumb to do that because your earning will drop and Wall Street jumps in, then stocks drop further. So you end up losing $billions. Apple would only cut the prices if they can boost the sales more to make up for it and make sure not to impact profit growth.
Yeah, this probably doesn’t make Apple think “Great, now we can lower prices on our products”, but more likely “Great, that will improve our profil margin!”.
Typo! profil margin = profit margin! (why the hell can’t we edit typos like that in our posts? grrr!)
Yeah, we keep asking WordPress …
Bingo. This will be nothing more than a “profit” increase.
Become an Apple shareholder. Between the dividends and future gains from higher profits, that discount could be yours after all.
Why isn’t the President reducing our world’s highest corporate tax rate to allow companies to be more competitive and encourage manufacturing here!?! Instead, we have companies leaving to more tax-friendly countries while Obama’s only response is to call them unpatriotic. Idiot!
Why have conservatives at the state and federal level consistently slashed funding for education over the past four decades, reducing our long-term global competitiveness? It’s gotten so bad that we have ignorant internet commenters blaming complex, long-standing structural issues on a single figurehead who has only been in office for the past six years! Idiots!
Please leave your Conservative vs. Liberal agenda at home. I’m strictly stating the obvious, and we do have the world’s highest corp. tax rate. The fact is, Democrats and Obama are against lowering that rate to a competitive level while we watch corporation after corporation leave the United States or use our tax loop-holes to funny their money out of the country to avoid Federal taxes all together (i.e. Apple and Google). And since you went Conservative vs. Liberal, you do know that the Democrats have controlled The House and Senate 6 of the last 8 years, so you couldn’t be more wrong with your blanket statement of “conservatives slashing education funding”. Liberals love spending other people’s money or money we don’t have. Conservatives tend to be more fiscally responsible. There is much waste and over spending in almost every government agency, including the Department of Education………..which should be dissolved along with the IRS. But thank you for the laugh from saying Obama has nothing to do with taxes and that conservatives are to blame for our work force being so stupid. Please see Common Core if you really want to get to the bottom of why our youth are so stupid and uneducated. Good day, young comrade!
lol “leave your Conservative vs. Liberal agenda at home.” then goes straight to bashing the liberal side.
Please tell us the sacrifices corporations have made for this country.
On my last visit to Arlington National Cemetery I didn’t see a single logo that said IBM, GM, Apple
..
This move seems to encourage more companies to move with the tariffs will being removed.
Liberal or Conservative there are so many tax loopholes that most money is not even taxed low or high but instead is enjoying stout Irish weather or wandering the Luxembourg countryside.
And not until US workers accept low pays for the jobs and not involve fking unions…Yup, don’t complain when a garbage truck driver make 6 digit pays thanks to the union. That’s so encouraging, isn’t it? Tell our kids not to go to college but focus on garbage trucking business.
Given the impact the “carbon emissions” deal Obama’s trying to strike (much higher energy prices here), any price savings will not matter.