It was expected that most Apple products would be excluded from the final list of tariffs to be imposed on Chinese imports, and that has now been confirmed – for now …
Happily for Apple, both the Apple Watch and AirPods have been left off the list of products that will be subject to 10% import tariffs from September 24. The NY Times notes that they were among 300 product lines removed from an earlier draft.
The administration did remove roughly 300 product lines — and some individual products — from the list after companies objected. Among the items dropped are smart watches, Bluetooth devices, bike helmets, plastic gloves, high chairs, play pens and certain chemicals. But, in some cases, partial product lines will be taxed while other parts are not. For example, high tech network routers and smart watches share a product line, but under the United States trade representative plan, the routers would be subject to tariffs while watches are not.
The arbitrary nature of the product codes and splits suggests that the Trump administration bowed to pressure from Apple and other American tech companies.
Once the new tariffs kick in, it will mean that around half of all Chinese imports will be taxed, with the 10% figure set to increase to 25% in January.
China has said that it will retaliate dollar for dollar with tariffs on US products imported into China. Trump has threatened that, if this happens, tariffs will be extended to almost every product imported from the country – including iPhones.
China has also threatened to completely block the sale of Chinese components to US-owned companies, which could potentially see iPhone production halted once supplies run dry. Apple’s reliance on Chinese suppliers would make it extremely challenging to source alternative components from other countries.