During Apple’s Q3 2018 earnings call this afternoon, Tim Cook reiterated Apple’s position on tariffs and the effects they have on consumers. Cook explained that tariffs can lead to “unintended consequences” for consumers and the economy, while also noting how such tariffs could affect Apple products…
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Cook explained that Apple’s view on tariffs is that they often wind up showing up as a tax on the consumer, and ultimately lead to lower economic growth. Further, they can bring about “significant risk” of unintended consequences:
Our view on tariffs is they show up as a tax on the consumer and wind up resulting in lower economic growth. And sometimes can bring about significant risk of unintended consequences.
The Apple CEO did acknowledge, however, that trade agreements between the United States and other major countries are “very complex” and that some could use modernization. Again, Cook said tariffs are not the correct approach to solving those issues:
“The trade relationships and agreements that the U.S. has between the U.S. and other major economies are very complex, and it’s clear that several are in need of modernizing, but we think that in the vast majority of situations that tariffs are not the approach to doing that.”
Earlier this month, it was reported that the Apple Watch was among devices that could be hit by the latest round of U.S. tariffs on some $200 billion worth of Chinese goods. If those tariffs go into effect this fall, Apple Watch could face a 10 percent import tariff.
On today’s call, Cook explained that Apple is “evaluating” that tariff and will share its views and findings with the administration.
“There is a fourth tariff which includes goods valued at $200 billion, also focused on goods that are imported from China. That one is out for public comment, probably like everyone else we’re evaluating that one, and we’ll be sharing our views of it with the administration.”
All in all, Tim Cook says he’s hopeful that “calm heads prevail” when it comes to tariffs, noting that there is an “inescapable mutuality” between the United States and China:
“There is an inescapable mutuality between the U.S. and China that each country can only prosper if the other does. And, of course, the world needs both the U.S. and China to do well for the world to do well. Like I said, I can’t predict the future but I am optimistic the countries get through this and we are hoping that calm heads prevail.”