President Trump says U.S. will add additional 10% tariff on China imports; Apple stock drops

Kif Leswing for CNBC:

Apple stock dropped sharply after President Donald Trump said on Thursday that the U.S. will put an additional 10% tariff on $300 billion worth of goods imported from China starting on September 1.

Apple stock was down more than 2% at one point on Tuesday, erasing previous earlier gains. The Dow dropped more than 200 points on the Trump tweet. The S&P 500 was down less than 1% but had earlier gains wiped out.

The company assembles iPhones and other computers in China, making it vulnerable to price increases if a tariff were to be placed on Chinese exports, although it is unconfirmed which Apple products may be affected by the proposed tariff.

On June 17, Apple said in a letter to U.S. trade representative Robert Lighthizer that a fourth proposed tariff list which covers an additional $300 billion of imports from China would cover “all of Apple’s major products” and would would hurt its contribution to the U.S. economy. Apple can also apply for exemptions or exceptions for its products.

MacDailyNews Note: Apple CEO Tim Cook on China tariffs from the company’s July 30th conference call with analysts:

The way I view this is, the vast majority of our products are kind of made everywhere. There’s a significant level of content from the United States and a lot from Japan to Korea to China and the European Union also contributes a fair amount. And so, that’s the nature of a global supply chain. Largely, I think that will carry the day in the future as well. In terms of the exclusions, we’ve been making the Mac Pro in the U.S., we want to continue doing that. And so, we’re working and investing currently in capacity to do so, because we want to continue to be here. And so that’s what’s behind the exclusions. And so, we’re explaining that and hope for a positive outcome.

24 Comments

  1. China, NK et al will retaliate big time against Trump tariffs during his campaign next year, watch out for repeated missle tests, nuke tests, big military exercises etc near election day.

  2. I am unclear how all this random rhetoric is helping the economy. Business sentiments are being bounced around like crazy and it must be making it hard to plan for growth.
    The cynical in me thinks that someone is making good money off knowledge that Trump is going to make yet another reactionary statement and cause wild swings in the market.

    1. I just looked at my iPad for the first time today. The three breaking news stories on the login screen were:

      This tariff and the resulting sharp drop in the stock market. 2. The announcement that we are surrendering to the Taliban, the guys who sheltered the men who killed 3000 people on American soil. 3. The announcement that Potus is personally cancelling a $10 billion military contract won through competitive bidding because he doesn’t like the winner’s politics.

  3. Spend some time reading about what companies are actually doing and have done. Quite a bit of manufacturing has moved to Vietnam with similar wage costs. Many others have found better deals outside of China.
    The end game should be to manufacture zero in China.

    Did you know that from the end of Clinton’s presidential term to now that pharmaceutical manufacturing has shifted 80% to China? Our enemy, communist China is in charge of making OUR medicine. That is insane but then again the big drug companies are corrupt.

    My point is China might be gearing up for revenge on the opium wars. Britain was mostly to blame but the US had a small part in it too. My guess is China has a long memory.

  4. Give Trump some time! I would like to see an agreement right before the elections! China is hurting because of the tariffs and they are waiting an hoping for the Dems to win so we cave again and send them our jobs, etc! If Trump wins 2020, I will bet that China comes to the table and it will be better for the US in the long run! Ignore CNN, etc and watch the Trump speeches at rallies and when he talks through the day that many of us miss and hear things from him instead of the media flipping what he says! The media is evil, the enemy of the people, and one sided left wing and that is very dangerous to our country!

    1. I agree with you 100%. When President Trump wins the 2020 Election the Chinese Commies will come to the table and resume trade talks. And it will be successful. No more stealing our IP and etc.

    2. Yes, cashxx, I agree completely! Give him some time. And not in a minimum security prison, either, for the approximately 10 separate acts of obstruction of justice he engaged in that are documented in the Mueller report. And for his charity fraud. And his tax fraud. And his inauguration funding. And his violations of the emoluments clause. And, of, right…Michael Cohen goes to prison but not his un-named co-conspirator who is…um, TRUMP. Bet Gates, Cohen, Flynn, Papadopoulos, Alex van der Zwaan etc. all lied (and were sentenced) are kicking themselves saying “gosh darn it, T was really innocent, so why did we lie about it?”

      If Obama was involved in any ONE of these situations, you would be calling for his impeachment. But since Trump is “our guy” it’s OK? The moral relativism of T supporters sickens me. I spent 8 years hearing people bitch and moan with outrage about alleged shenanigans in the Obama administration (Benghazi, Fast and Furious, Clinton foundation etc.) and abuse of power/malfeasance. If it’s wrong, it’s wrong. You should be pissed about anyone gaming the system, cheating, lying, benefiting, asking foreigners to hack your opponent etc. But as far as I can tell with every single T supported I have met it’s OK as long as its someone from your part doing it. The Swamp is now Swamp 2.0 on steroids, but T gets a pass on that. Ridiculous.

        1. TowerTone: What someone else did doesn’t matter. If Jimmy stole an Xbox and got away with it that doesn’t mean Timmy should get a free pass on stealing a bicycle.

          You ADMIT that bad behavior is wrong. And you DEMAND that it be punished. But only if it’s The Other Guys. Moral relativism. Pathetic. Someone else’s bad behavior is no excuse for you to do wrong.

          Wrong is wrong. And if you don’t see that you’re part of the problem.

          1. Yeah, too bad about your reading comprehension.

            When you have real, substantial EVIDENCE you act on it.
            This hasn’t been done to the Obama/Clinton Machine yet.

            Meanwhile you can scream, cry and holler all you want but nothing has been found on Trump. After two years, nothing.

            The obstruction “charge” is a joke.
            Denying your guilt during an investigation is not Obstruction.
            Keeping the FBI from looking in to your illegally used server and then lying about its use is obstruction. That’s not the only charge, jut the most obvious.

            So keep using the media to tell Americans to pay no attention to that man behind the (VERY yellow) curtain,It’s the Left’s ONLY chance….!

        2. A Trumpanzee uses whataboutism as a deflection for the massive corruption of the current administration. How predictable.

          We all know that both parties are slimy. What is hilarious is how you continue to defend the most corrupt of them all, Trump.

          You have had decades to prosecute your pet political scapegoats: why haven’t you? The one and only reason Trump isn’t in jail with his cronies Cohen, Stone, and Manafort is simply because McConnell is so corrupt too that he will block all legal action against the 10-time obstructionist-of-justice president. Party comes before duty every time, that is the current pathetic level of mismanagement of the US government that apparently you don’t have a problem with. Constitutional duty, which the extreme right selectively invokes when it suits them, would dictate that Congress have full knowledge of any president’s foreign business contacts at all times. Trumpanzees use logical backflips to undermine the Constitution for one reason only: to entrench McConnell’s political power. Trump is irrelevant, he’s just a rubber stamper for whatever the GOP handlers give to him … which to date hasn’t been anything good for ~99% of Americans.

          Every time a Trump administration official refuses to turn up to a court-ordered subpoena is an additional obstruction of justice, by the way. The administration acts like it is a dictatorship, not a republic with legal checks and balances.

          Your move. chief.

    3. You know shit about the issue,. Go back to the party that hates anything but white people with three teeth. He has already lost the tariff war. No, sorry. You’ve already lost the tariff war.

      What a dumb comment from a dumb person.

    4. I have watched the Trump rallies, including the part where he stood with his jaw set defiantly like Il Duce while a white crowd chanted that a black American should go back to Africa

    5. @ cashxx: stop the bipolar thinking and look at objective facts.

      How much time until results are achieved? Also, what indicators will you use to decide when the tariffs are working? Clearly you underestimate China if you think that a nation 4 times as large as the USA and much more dominant manufacturing capabilities is going to back down to an aging US with crumbling infrastructure and a $22 Trillion debt and a 4-year presidential term.

      US Corporations that outsourced to China decades ago aren’t going to pull out now. No tariff of ANY amount will offset the wage difference, which is the short term indicator that stupid US executives consider first and foremost. The loss of IP that they whine about has been happening since Tricky Dick opened up China and those costs have been ignored — not one US corporation was slowed in moving to China despite knowing the massive corruption there.

      Why would anything change now? All costs are passed to the consumer, no US corporation cares about absolute prices to the consumers. They only work to manage their margins and executive awards. Name any significant corporation that has changed course due to Trump’s charade.

      China’s population growth, prevailing wage, lack of significant environmental or labor protections, and willingness to manipulate currency dictates that US corporations keep pandering to the Communist overlords there no matter what. All they ever see is short term profits, because that’s where the future population growth is (especially since the administration attempting to shut off US immigration makes the US population stagnant and aging in comparison to Asian countries). In doing so, they just gave away all the tech knowledge that the USA once held. The genie cannot be stuffed back into the bottle.

      What large manufacturers are re-opening their rust belt factories? Name one. Car makers are reeling from the steel tariffs and killing off low-cost models in an effort to stay in the black, not that a Trumpanzee would notice. The high fliers in the current US economy like Amazon are merely distributors for Chinese junk, and they refuse to build a warehouse anywhere unless local taxpayers bend over and get shafted with 100% of the tax burden to build the infrastructure that Amazon demands. The old economic traitor corporations don’t even do that. They not only abandoned their factories in the USA, many are now outsourcing design and customer support too. 70% of jobs for their old US consumers that Trump brags about are low-wage part-time zero-benefit dead-end jobs. Entrepreneurship in the USA is falling fast because any startup gets steamrolled by the trillion dollar behemoths that refused to maintain local manufacturing. None of this will reverse because some economically illiterate tweetaholic wants it to be. The megafactories in China will simply route final packaging operations to another low-wage country that Trumpy hasn’t tariffed yet. With >250 countries to choose from, corporations will have many other choices.

      Since Trump the self-proclaimed “greatest deal maker” came up with nothing again this week in the latest Chinese trade talks, Trump has threatened to add more items to the tariff list — this time with consumer items on it. Trump’s base of Walmart shoppers will actually start to feel the pain — well, if Trump doesn’t blink as he often does. The endless bluster is all political calculation, certainly not economic strategy. A cohesive economic strategy would have first strengthened trade ties with the EU, Americas, and other trustworthy partners so that US producers didn’t have to go on welfare to keep their farms. Trump instead has alienated all other US trading partners.

      Face it, Trump has accomplished nothing with China but pester the tiger. The IP theft continues. The Fentanol keeps rolling in. The counterfeit Chinese knockoffs of US engineered products continue to be pedaled in China with impunity. The US jobs gains that Trump claims are so historic were recently revised downwards as more data has come in. US corporations continue to park their cash overseas instead of building in the US.

      The Chinese Premier now essentially a dictator for life, can easily outwait the short time Trump has in office. If Trump wanted to reverse the rise of China, he should have started by writing laws that force traitor US corporations from outsourcing. Instead he gave them a debt-funded tax break that individual taxpayers will have to pay back for decades.

      Where is Apple in all this? Right alongside every other traitor US corporation.

  5. It’s funny/ironic that if Apple, god forbid, had made the new MacPro from industry standard parts, it could easily have avoided all this and made it in the USA.
    Sometimes Apple takes “think different” to far.

  6. Hey, where are those irrepressible butt buddies, like first 2014? I miss their wisdom. Weren’t they in love with this ass fuck trump? Now, he threatens even their sacred Apple. I bet they’re bleeding from their rectums now.

    1. Trump’s idiot economic advisors talk out of both sides of their mouths. They have claimed that China will absorb 100% of the tariff costs, which has never happened. Tariffs have always proven to be taxes on the end consumer, often as cover for manufacturers to actually raise prices beyond the actual tax increase. Then to a different audience the Trump administration officials claim that higher consumer prices for Chinese plastic junk will prompt US consumers to buy US-made stuff, which is exceedingly rare to find in any consumer store. So which is it?

      Dreaming that Wally World and Amazon will suddenly enlarge their “Made in the USA” store sections overnight is pie in the sky thinking. Despite the many presidential Faux retweets between golf games, US companies haven’t lifted a finger on-shore any of the production they outsourced over the last 3 decades. Apple certainly isn’t doing so. Consumers in the USA have been conditioned for 2 generations to buy cheap priced disposable junk instead of high durable quality goods. Hell, American laziness is at an all time high. You can go to an estate auction and buy beautiful fine China for less than a year’s supply of paper plates at Walmart and still Americans overwhelmingly choose the stupid wasteful lazy disposable option.

      Sadly, Trump has trashed trade with responsible nations too.

      Notable quote:

      “In recent years, the trade deficit led some misguided politicians to call for protectionism, warning that otherwise we would lose jobs. But they were wrong again. In fact, the United States not only didn’t lose jobs, we created more jobs than all the countries of Western Europe, Canada, and Japan combined. The record is clear that when America’s total trade has increased, American jobs have also increased. And when our total trade has declined, so have the number of jobs. Part of the difficulty in accepting the good news about trade is in our words. We too often talk about trade while using the vocabulary of war. In war, for one side to win, the other must lose. But commerce is not warfare. Trade is an economic alliance that benefits both countries. There are no losers, only winners. And trade helps strengthen the free world. Yet today protectionism is being used by some American politicians as a cheap form of nationalism, a fig leaf for those unwilling to maintain America’s military strength and who lack the resolve to stand up to real enemies — countries that would use violence against us or our allies. Our peaceful trading partners are not our enemies; they are our allies. We should beware of the demagogues who are ready to declare a trade war against our friends — weakening our economy, our national security, and the entire free world — all while cynically waving the American flag. The expansion of the international economy is not a foreign invasion; it is an American triumph, one we worked hard to achieve, and something central to our vision of a peaceful and prosperous world of freedom.” Ronald Reagan, 26 Nov 1988

      It goes without saying that Trump doesn’t understand anything Reagan stood for.

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