US Tariffs on China Would Hit Wide Range of Apple Products

A “wide range” of Apple Inc products including the Apple Watch would be affected by proposed US tariffs on Chinese goods, the company told US trade officials, but gave no sign of an impact on its iPhone cash cow.

Apple did not disclose specific revenues for most of the affected products, but of those the Apple Watch may be the biggest seller. It brought in about $6.1 billion in revenue last year, according to an estimate from analyst firm Bernstein. That represents a small portion of Apple’s $229 billion in overall sales, Reuters reported.

US President Trump tweeted on Saturday that Apple should make products inside the United States if it wants to avoid tariffs on Chinese imports.

Trump, speaking on Friday aboard Air Force One, said the administration had tariffs planned for an additional $267 billion worth of Chinese goods.

Trump tweeted that “Apple prices may increase because of the massive Tariffs we may be imposing on China—but there is an easy solution where there would be ZERO tax, and indeed a tax incentive. Make your products in the United States instead of China. Start building new plants now.”

Apple declined to comment. The technology sector is among the biggest potential losers as tariffs would make imported computer parts more expensive. Apple’s AirPods headphones, some of its Beats headphones and its new HomePod smart speaker would also face levies.

“The burden of the proposed tariffs will fall much more heavily on the United States than on China,” Apple said in its letter.

Apple laid out the impact on its products of the Trump administration’s proposed tariffs on $200 billion worth of Chinese goods in an unsigned letter it submitted on Wednesday to US officials as part of a public comment period.

Cellphones, the biggest US import from China, have so far been spared, but would be hit if Trump activates the new $267 billion tariff list.

“Our concern with these tariffs is that the US will be hardest hit, and that will result in lower US growth and competitiveness and higher prices for US consumers,” Apple said in the letter.

 No Mention of iPhone

The letter did not mention the iPhone, which accounted for about two-thirds of Apple’s $229 billion in revenue in its most recent fiscal year. The letter also made no mention of the iPad, which brought in $19.2 billion in sales in the most recent year, or most of its Mac computers, which generated $25.8 billion.

Apple did say its MacMini, a low-priced computer that comes without a keyboard or mouse, would be affected.

Many Apple accessories, such as mice, keyboards, chargers and even leather covers for iPhones and iPads would face tariffs, Apple said.

Shares of Apple closed down 0.8% in regular Nasdaq trade on Friday, and slipped another 1% in extended trading.

Apple also said computer parts for its US operations would be hit by the tariffs. The company said that “main logic boards with micro-processing units” could face levies, along with equipment used for research and development.