Apple shares drop on word tariffs could hit iPhone, Apple Watch & more

Apple shares drop on word tariffs could hit iPhone, Apple Watch & more

Trump, escalating trade war, threatens tariffs on all goods from China

Trump upped the ante on Friday, warning he was ready to slap tariffs on almost all Chinese imports to the United States, threatening duties on another US$267 billion of goods on top of US$200 billion in imports primed for levies in coming days. Start building new plants now. The company is concerned, however, about the Trump administration's proposal to add 25 per cent duties on another $US200 billion in Chinese goods, including a wider assortment of consumer-related items.

When US President Trump first tossed out the idea of starting a trade war with China, there was a serious chance those taxes would impact the prices of gadgets in the US.

While Apple did not offer an estimate of how much Trump's China tariffs would increase costs of production, the company argued that the tariffs will only hurt American consumers and companies, without curbing China's technology policies.

"We hope, instead, that you will reconsider these measures and work to find other, more effective solutions that leave the USA economy and USA consumer stronger and healthier than ever before".

U.S. President Donald Trump on Friday (September 8) upped the ante on China, threatening to slap tariffs on virtually all Chinese imports coming in to the U.S.

Apple is highly exposed to a trade war between the United States and China. Apple cited the Apple Watch, AirPods, and the Apple Pencil as potentially impacted products, but devices like the iPhone would likely be affected as well given a China-centric supply chain. China will wait until internal pressure builds on Mr Trump, analysts say.

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That's what the company told US Trade Representative Robert Lighthizer in a letter dated Wednesday, a last-ditch appeal to avoid additional tariffs on Chinese goods worth $200 billion that could go into effect as soon as Friday.

White House Economic advisor Larry Kudlow told CNBC that talks between the US and China were ongoing.

In addition, the chip industry is a source of trade surplus for the United States, including with China, Intel argued.

"Semiconductors are America's fourth-largest export, and our industry has a global trade surplus of over $6 billion and a surplus with China of close to $2 billion in 2017", Intel's letter said. Investors were told that the company was still evaluating the proposed list of goods that would be hit by the tariffs.

On Apple's most recent earnings call in July, Chief Executive Officer Tim Cook said the company could face such tariffs "related to data centers".

Apple generated $9.6 billion in sales in China in the fiscal third quarter, accounting for 18 percent of its total revenue in the period.

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