Apple could eat 10% tariffs but that won’t build American industry
- aug
- 06
- Posted by Michael
- Posted in Okategoriserade
U.S. President Donald Trump is imposing a 10% tariff on goods, including exactly the kind of phones, watches, tablets, and laptops Apple sells, and it's set to take effect on September 1, 2019. No exemptions for Apple either. If they actually go into effect and the policy isn't changed or some type of deal brokered before then.
Apple typically announces new iPhones and Apple Watches at the beginning of September and ships them mid-to-late September. Same with iPads and Macs in October. This year, that includes the iPhone 11. And that leads into Apple's traditional blockbuster holiday quarter. So, the fear is a 10% hike in the U.S. at a time when many people already feel the price of flagship phones is way to high, will cause problems either for profits or for sales, depending on whether the companies or customers end up eating them.
Kuo, for his part, thinks all the chewing is going to be done by Apple. Via McRumors:
In the mid-short term, if Apple absorbs most of the additional costs due to tariffs, there will be a negative impact on its profits from its hardware business, but the company will reap benefits in its brand image and relationships with suppliers. We also believe that the negative impact on Apple are limited and temporary because the profit from service business is growing, and non-Chinese production locations will gradually increase.
Specifically, Kuo thinks India, Vietnam, and other regions could meet U.S. demand for iPhone, Apple Watch, and iPad by next year and Mac by 2021.
As to bringing more manufacturing back to North America, well, you can't just tariff that back into existence. We'd have to choose as a priority matter of policy to start investing heavily back into trade school education and economic zones with massive capacity in close proximity in order to make that even feasible, much less viable. And well before the next few decades of automation hit, so we can ride the wave instead of being pulled down under it.
I'd love that but, so far, like most things, we've proven far better at talk than action, and much better at mortgaging future prosperity for present comfort anyway.
Let me know what you think.
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