As we have pointed out, the trade war between the United States and China has not yet touched the iPhone of Apple or other Apple devices. Friday, the United States lifted the tax on Chinese imports worth $ 250 billion; China has retaliated today by adding tariffs on $ 60 billion of US imports. Until now, Apple does not have to decide to protect its margins by raising the price of the iPhone in the United States. Morgan Stanley analyst, Katy Huberty, recently suggested that if a 25% rate was applied to Apple's smartphones, the price of the iPhone XR would increase by $ 160. Do not be fooled by tweets sent by President Donald Trump. China does not pay money in the United States because of tariffs. In reality, the additional tax is paid by American importers and consumers.
Although no Apple device is currently the subject of these rates, according to The Verge, accessories such as adapters, chargers, cables and cords have been taxed at 10% since September. Now the import taxes on these accessories are up to 25%. In addition to these accessories, the same applies to Apple iPhone cases and Apple iPad tablet leather cases. Apple absorbed the cost of additional taxes on these accessories, which meant that US consumers did not see any price increases for these items. But we can not expect the company to do it forever.
You may be wondering if Apple is not an American company? Why should its products be subject to a tax on importation?
Yes, Apple is a US company and if you wonder why its accessories are grouped in a group of products imported from China, the answer is quite simple. Apple designs these items in the United States, but assembles them in China. President Trump has often told Apple and other US companies that if they wanted to avoid tariffs, they had to move their production to the States. Apple CEO Tim Cook, who has had the opportunity to meet with the president several times, warned Trump that a trade war with China was not a good idea. At one of these meetings, the president would have promised Cook that the US government would not impose tariffs on the iPhone, although other members of the government denied that this promise was made.
Some Apple iPhone accessories, such as holsters, adapters, chargers, cables and cords are taxed at 25%
So why are the United States and China involved in this trade war? All of this goes back to the trade deficit. For decades, the value of Chinese products imported into the states has exceeded that of US products imported into China. The is due to a number of things; First, US consumers have more money to spend on imports than their Chinese counterparts. And second, the cost of assembling products in China is much cheaper than in the United States. The president sees it as a kind of scorecard that, in his opinion, shows that the United States is losing against China. The United States and China have been unable to reach an agreement on trade.
The other side of the trade war is that it weakens the Chinese economy. From December to March, Apple recorded an average 66% drop in iPhone shipments for each month. In April, the decline was sharply reduced to 3%, indicating a possible reversal of the situation for Apple in the country. Global phone shipments to China rose 6% in April, after declining 9 months out of 10.
