If Trump taxes everything that comes from China, iPhones could cost more money. Who wins? Samsung and other brands.
During his previous term, Donald Trump taxed products imported from China. Most iPhone components are manufactured in China, but Apple had managed to avoid taxes. As?
At the time, Tim Cook, Apple’s executive director, had persuaded the White House not to apply tariffs to most of the products the company sells, justifying that they would increase the prices of smartphones, computers and tablets and harm Apple, explains .
“Consumer electronics were definitely privileged” under US tariff policies under the Trump and Biden administrations, he told the American newspaper Mary E. Lovelyeconomist at the Peterson Institute for International Economics. “It shows the Tim Cook effect.”
As a candidate for the presidential elections, Trump proposed taxing between 10% and 20% on goods imported from anywhere and applying a tariff of 60% or more on everything imported from China.
This tariff, if applied to Apple products, could impose a tax of around $300 on a $1000 iPhone. A portion of this higher tax would likely be reflected in the price you pay for iPhonessays the Post, which highlights that Trump and some supporters do not believe that increasing taxes on companies will change the price of products.
I and Samsung, mostly produces its cell phones in Asian countries other than China: Tariffs on imports from that country do not apply to you.
One published this year shows how companies in the fashion industry have adapted to these types of rates during Trump’s previous term (maintained largely by Biden). Some strategies adopted include, in particular, transferring production to other countries.
Even so, Scott Lincicomeeconomist at the libertarian think tank Cato Institute, explains that does not believe that Apple is capable of quickly moving away from Chinese factories to avoid higher fees.
In recent years, Apple transferred a small part of its production to other countries, including Vietnam and India. The Post explains that, even so, with or without tariffs, Apple is stuck, for the foreseeable future, with a marriage with Chinese factories“where armies of people and equipment produce fleets of Apple devices.”
“With a tariff of 60%, you have to think that people will notice“, concludes the expert.
