President Trump may not spare Apple’s iPhone from trade war

“The phrase on the back of iPhones — ‘Designed by Apple in California. Assembled in China’ — highlights a key reason for the company’s remarkable success but also shows how exposed it is to the escalating U.S.-China trade fight,” Tripp Mickle and Yoko Kubota report for The Wall Street Journal. “By assembling its phones in China, Apple Inc. tapped into China’s vast workforce and formidable manufacturing capabilities. But it also made Apple’s most-profitable product a Chinese export—one that could be subject to tariffs in the trade dispute. On top of that, China is by far Apple’s most important market outside the U.S., leaving it exposed if Beijing decides to retaliate by squeezing its sales.”

“Smartphones weren’t included in the levies on $34 billion of Chinese goods imposed on July 6, nor are they targeted in a second round worth $16 billion that is expected in August. They also haven’t been included in a third round of $200 billion in goods that the Trump administration identified earlier this month,” Mickle and Kubota report. “But now, President Donald Trump is threatening levies on a total of $500 billion in imports, which would cover just about everything China ships to the U.S., including iPhones, trade experts say.”

“China imports much less from the U.S.—about $130 billion in goods annually—which limits its options for tit-for-tat tariffs. But China could retaliate with higher duties and punitive actions against American companies,” Mickle and Kubota report. “Apple would be a likely target because of the iPhone’s 9% share of China’s smartphone market, according to Mr. Dollar and other trade experts.”

MacDailyNews Take: Hence insurance policies already in place:

Apple launches $300 million China Clean Energy Fund – July 13, 2018
• Apple to spend $507 million to set up two more research centers, boost investment in in China – March 17, 2017
• Tim Cook back in Beijing, says Apple will further boost investment in China – August 16, 2016
• Apple invests $1 billion in Chinese ride-hailing service Didi Chuxing – May 12, 2016
• Apple expands renewable energy, new environmental initiatives in China – May 10, 2015
Apple invests in China solar project – April 16, 2015

“China also has an interest in keeping the peace, given the number of jobs Apple provides. About 10,000 people in China are employed directly by Apple, the company said,” Mickle and Kubota report. “Indirectly, Apple says it accounts for three million jobs there through its supply chain, which includes contract manufacturer Foxconn Technology Co. It also says it provides work for 1.5 million app developers in China.”

Read more in the full article here.

MacDailyNews Take: We live in the era of overwrought hand-wringing.

SEE ALSO:
Why the US-China trade war may not have much impact on Apple – July 17, 2018
What trade war? Markets shrug off US-China dueling tariffs – July 6, 2018
The Trump administration told Apple it would not place tariffs on iPhones assembled in China – June 19, 2018
Apple CEO Tim Cook doesn’t expect a full-blown trade war between the U.S. and China – June 5, 2018
China now as big a market for Apple as Europe on strong growth and iPhone X success – May 2, 2018
Designed in California. Assembled in China. How Apple’s iPhone skews U.S. trade deficit – March 21, 2018
Analyst: President Trump’s tariff impact on Apple would be just a ’rounding error’ – March 7, 2018

38 Comments

        1. *Sighs a patronizing sigh, shakes head and pats Kent’s head*

          I feel sorry for you, your orange-tinted glasses have blinded you to reality, making you an easy mark for purveyors of manufactured rage.

    1. Study: Physically weak men more likely to be socialist, strong men more likely to be capitalist

      Obama vs. Trump. I rest my case.

      A new study from Brunel University London found that physically weaker men are more apt to believe in socialist policies, such as redistribution of wealth. Meanwhile, stronger men are more geared to believe in the capitalist concepts, such as the idea that people should keep what you earn… Stronger men tend to reject the redistribution of wealth, whether they are financially rich or poor.

      The findings of the Brunel study somewhat match results previously found in a similar 2013 study done by Aarhus University in Denmark. “Our results demonstrate that physically weak males are more reluctant than physically strong males to assert their self-interest – just as if disputes over national policies were a matter of direct physical confrontation among small numbers of individuals, rather than abstract electoral dynamics among millions,” said Michael Bang Petersen, who lead the Aarhus University study.

      1. Brunel University study shows that powerful men favor existing power relationships while less powerful individuals favor cooperation. That is hardly a surprise!

        1. I didn’t need any studies to tell me that pussies lack confidence in their own abilities to provide for themselves and/or their families and therefore gravitate toward unworkable redistribution schemes and promises of endless free lunches.

          1. Trump being the biggest pussy of all. How many contractors have had to sue him to collect payments for work they did? Yeah, real strong guy when all he did was dole out hush money through Coen and other crooked lawyers.

            Lock HIM up!!!

            1. @ Brent Crude: Why not also Trump for his repeated and continuing corruption?

              Why exactly should you and I spend $12 billion in taxpayer money for farmer welfare as as result of Trump’s stupid trade wars? Where are the protests of government mismanagement from you now????

    2. Firsty:

      Don’t forget that Trump is an equal opportunity sexual deviant, paying through the nose for each cheap trick. Well, truth is Stormy et al could have probably held out for bigger payouts had they consulted the Trump exes.

      Anyway kissing old men is Trump’s latest thrill, probably an effort to save money:

      1. I guess you don’t care that Communist China is putting Tariffs on the U.S. goods which amounts to in the Billions of Dollars every year. That is nothing but we the U.S. are paying Taxes to those Commie Turds and they will use it against us. The U.S. is always getting Screwed on these damn Tariffs by other Nations and President Trump is trying to make it an equal play field. IMO……

        1. We all agree that China should be dealt with much more firmly, especially in matters of ip theft. One way to do this is to levy strong standards and requirements for US corporations doing business there. Why didn’t that ever happen? Perhaps because every major US company has rushed to cash in on the cheap labor China offers—especially Apple. But also right wing companies too. Profit always trumps national patriotism when you’re a corporate executive.

          But wise regulation is not what dumbass Donny is doing, don’t you see? Somebody talked Trump into kicking off a trade war specifically to buoy dead end industries like coal and steel. He bragged that the US can easily win a trade war. He is dead wrong. Everyone loses a trade war.

          US tariffs are taxes on Americans. China will have no problem selling their products elsewhere.

          Meanwhile the unintended consequences are just starting to be felt. Soya bean prices have fallen over 20% and US farmers are panicked. The dumbass Donny solution to bad trade policy is a one-off welfare payment to farmers so that all the taxpayers can take it in the shorts. The supposedly conservative party all shrugs their shoulders and can’t even raise a murmur of opposition to the taxpayer waste. Obama was crucified for bailing out the auto industry, for which the feds were repaid with interest. Trump burns $12 billion in the first round of a trade implosion and the so-called conservatives all like it now? How many more billions in lost business before y’all get a clue that Trump’s 10 gallon hat is full of horseshit?

          Where are the conservatives here? Who the hell supports such stupidity? Trump is a nincompoop ruining the reputation of the USA and doing direct damage to US businesses. You cannot be economically literate and pro-Trump. To support him is to be willing to commit fiscal suicide in order to win political arguments. I’d rather see the US win economically and have both parties die a painful death. Especially the zero fact, zero personal responsibility, zero class, zero expertise proud ignoramus Trumpists.

          This formerly card carrying republican ripped up his card last year.

  1. Do Cons even understand that tariffs are taxes? Trump gave huge cuts for his millionaire buddies, and is crushing the rest of us to death with new taxes. And the Cons think anything Trump does must be genius because the rest of the country is appalled by him.

  2. On the one hand, Apple is extraordinarily dependent on China and could be devastated if directly targeted in a trade war.

    On the other hand, targeting Apple would mean “going fully nuclear”, so there’s a chance/likelihood that Trump will cool down before it gets to that point.

    The problem is that Apple could face a quadruple-impact with long term consequences:
    1) Components get taxed going into China.
    2) Assembly workers/plants get heavily taxed.
    3) iPhones get taxed coming into the US.
    4) Other areas engaged in trade wars with the US tax iPhone imports.

    The cost of the iPhone (and other Apple products) could sky-rocket as well as end up being severely constrained. While directly impacting Apple’s bottom line immediately, the greater impact would be felt long term as users jump out of the ecosystem.

    While it’s easy to see why Apple would be “the nuclear option” as a target, before doubting that China would do anything retaliatory against their own self-interests, realize that the amount of money they make on the iPhone assembly, is a tiny fraction compared to the US. and even smaller overall to their overall economy.

    Further, losing assembly work for the iPhone would be offset by assembly work for Asian handsets.

    This whole trade war is such a bad idea because while there is a trade imbalance, the US is far more dependent on existing trade than China.

    It’s a lot like the Vietnam war. We had far superior power, but weren’t really prepared to use it, and they were far more willing to have large numbers of their people die than we were.

    1. “so there’s a chance/likelihood that Trump will cool down before it gets to that point”

      Hahahahahahaha. So many people keep talking like the senile orange man-baby is going to turn sane at some point. Over and over and over this has happened.

      It’s NOT going to happen.

      1. You’re absolutely correct. I should’ve written that differently. I meant that it would be more along the lines of Trump getting distracted by something else or the impact would be so significant that he would’ve already backed down before things got to that point.

        This whole thing is insane.

  3. This is wonderful news, I hope Apple’s home nation spares none of their companies and individuals from this latest round of war mongering. This is a fantastic opportunity for the free and civilized world to enhance and take charge of it’s relationships with trustworthy partners.

    Uniting you’ll stand, divided you’ll… well just have a look at Apple’s home nation right now, a mess of a terrorist nation.

    And more karma’s coming.

  4. Apple needs to suck it up the same way soybean farmers in the Midwest are doing. Don’t be sissies. Accept higher priced iPhones as a sign of America’s increasing greatness.

    1. “…a sign of America’s increasing greatness”

      I can’t decide if that is a clever sarcastic joke or a piece of utter right-wing stupidity. Could be either!

    2. You want Donnie to give poor Apple a $12 billion bailout after slapping on an arbitrary 25% iPhone import tariff? That’s basically what he did for soya farmers. I remember when Republicans claimed to be against government manipulation of business, and free trade. What happened over there?

    1. Do you think that the absolute dictator who runs China can’t get up some morning, read the latest tweet, get mad, and abolish your “free trade zone” with a single signature? We are living in a world where all the most important decisions are being made by irascible old men who have no regard for due process.

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