‘People Could Stand That Very Easily.’ Trump Threatens 10% Tariffs on iPhones
S E E D E D C O N T E N T
‘People Could Stand That Very Easily.’ Trump Threatens 10% Tariffs on iPhones
Posted:Tue, 27 Nov 2018 12:30:42 +0000
Apple Inc., which has lost a fifth of its value in a tech market rout since October, is poised for another setback after U.S. President Donald Trump suggested that 10 percent tariffs could be placed on mobile phones, like the iPhone, and laptops made in China.
The company already is facing reports of suppliers cutting forecasts, signaling the new iPhone models introduced in September aren’t selling as well as anticipated. Trump’s comments to the Wall Street Journal that he may include Apple’s signature product in another round of tariffs on Chinese imports are another blow for Chief Executive Officer Tim Cook.
“Maybe. Maybe. Depends on what the rate is,” the president said, referring to mobile phones and laptops. “I mean, I can make it 10 percent, and people could stand that very easily.” Apple stock fell about 1.6 percent in extended trading Monday following the comments.
The U.S. is due to raise import duties on about $200 billion worth of goods from China to 25 percent from 10 percent on Jan. 1. The vast majority of iPhones and other Apple products are built in China and then exported globally. Apple couldn’t be reached for comment.
Some analysts said the comments may shake investors. With consumers “clearly price sensitive” and the average sales price of an iPhone reaching almost $800, “the last thing Cook and investors want to see is additional tariffs added to iPhones and impacting demand drivers at this crucial growth juncture for the company,” Daniel Ives, an analyst at Wedbush Securities, wrote Monday in a note.
The price of an iPhone ranges from $449 to $1,449 in the U.S., including older models such as the iPhone 7 that Apple still sells.
Shares of Hon Hai Precision Industry Co., the biggest iPhone assembler, slipped about 1 percent in Taiwan trading Tuesday and have dropped about 40 percent this year. Inventec Corp., which supplies Apple and other U.S. tech companies, fell 4.3 percent to the lowest level in more than a year.
So far, Apple’s most lucrative devices, like the iPhone and iPad, have been left out of U.S. tariffs. Earlier this year, Apple said products like the Apple Watch and AirPods would be affected before the U.S. said it wouldn’t impose taxes on such items. Still, the company warned in September, that other items, like the Mac mini, Apple Pencil stylus, and some cables and cases, could be harmed.
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Trump wants to put a tariff on a product that never goes on sale.