“That shiny new iPhone may say ‘assembled in China’ on the back, but its origins are scattered around the world,” Ethan Baron writes for The San Jose Mercury News. “Now that complicated supply chain may put Apple — the world’s most valuable company — in the bull’s eye as President Donald Trump and congressional Republicans consider sweeping import tariffs or a comprehensive border tax on incoming products, components and raw materials.”
“The administration’s actions would affect a who’s who of the Bay Area’s big name tech companies — which could see sales, revenue and access to global talent take a hit from new fees and the trade wars that could follow,” Baron writes. “Only two months into the Trump administration, it’s difficult to discern how an import tariff or border tax might take shape, but the president has said he wants to punish U.S. companies that make goods overseas to sell back home. Imposing new costs on imports would encourage domestic manufacturing and create jobs, Trump has argued.”
“While campaigning, Trump mentioned a 45 percent import tariff on goods from China and 35 percent on imports from Mexico. More recent reports suggested the Trump transition team was looking at a 10 percent fee. House Republicans, meanwhile, have proposed a 20 percent ‘border adjustment tax’ covering all imports from all countries,” Baron writes. “The list of firms with the most to lose from an aggressive new tariff or tax regime includes the valley’s biggest names: Google, Tesla, Oracle, HP, Cisco, Intel, Seagate, Western Digital, Nvidia, Marvell Semiconductor and more.”
“Northwestern University law professor Steven Calabresi last week said the proposed 20 percent border adjustment tax would ‘encourage Americans to buy American products’ and ‘promote good jobs here in the United States’ while raising $1 trillion over 10 years,” Baron writes. “‘It will allow us to cut income taxes, which discourage people from working. It is smart to discourage a little bit of the buying of foreign goods if you can then cut income taxes and get people back into the workplace or get them to work harder,’ he said Thursday in an op-ed in The Hill.”
Read more in the full article here.
MacDailyNews Take: There are so many unknown variables — corporate taxes, repatriation taxes, tariffs, domestic manufacturing incentives, etc. — that it’s impossible to know how Apple will be affected (or even if it’ll all roughly balance out).