Caixin
Caixin Global – Latest China News & Headlines

Home >

ABOUT US

CX Tech is Caixin Global's real-time tech news portal, featuring 24-hour news, short-form analysis, and roundups from business and tech media in China.

LATEST
Trending in China: Can Music Streamers Help Users’ Depression?
Core Parts of China’s Beidou Satellite System ‘100% Made in China’
Trending in China: Xiaomi CEO’s Shows How Best To Harness China’s Social Media Humor for Serious Business
Apple Takes Down Over 30,000 Apps from China Store Amid Government Crackdown
Chinese Chipmaker SMIC to Establish Joint Venture for Wafer Production
Microsoft Said Plan to Acquire TikTok Will Continue
Uber Abandons Plan to Move Regional Headquarters to Hong Kong
Trending in China: Undergraduate Degree in Housekeeping — Valuable Asset or Waste of Resources?
Huawei and Apple Shine in China’s Smartphone Market During Second Quarter
Video Streamer iQiyi Eyeing Southeast Asian, Middle East Expansion, Executive Says
Lawson Expands in China With Prefab Convenience Stores
TikTok Undergoing U.S. Investment Review, Treasury Secretary Says
Chinese Community E-commerce Firm Nice Tuan Nets $80 Million in Third Funding in 2020
Trending in China: Shanghai Film Festival Rekindles Childhood Memories with Outdoor Screenings
China’s EHang Gets Green Light to Test Self-Flying Vehicles in Quebec
Trending in China: Pop Star Jay Chou’s Livestream Signals Kuaishou’s Increasing Partnership with Celebrities
Tencent to Pick Up Stake in Shanghai-listed Weaver Network for $110 Million
U.S. Senators Worry TikTok Could Be Used to Interfere in Elections
Tesla Launches Hiring Spree in China as It Prepares for Shanghai Production of Model Y
ByteDance AI Lab Head to Leave as TikTok Faces Global Headwinds
Apple Swerves $150 Levy on iPhones As U.S. and China Strike Trade Deal

By Bloomberg / Dec 13, 2019 10:58 AM / Business & Tech

Photo: Bloomberg

Photo: Bloomberg

(Bloomberg) — Apple avoided 15% tariffs on its most important products, the iPhone, iPad and MacBooks, after U.S. President Donald Trump signed off on a trade deal with China.

The new import duties were due to kick in Dec. 15 and could have added about $150 to the price of iPhones during the crucial holiday shopping season, according to Wedbush Securities analyst Dan Ives.

“Trump delivered an early Christmas present to Apple,” Ives wrote in a note to investors following news of the trade deal. “If this tariff went through it would have been a major gut punch for semi players/Apple and could have thrown a major wrench into the supply chain and demand for the holiday season.”

Holding product prices steady while swallowing additional tariffs would have cut Apple’s earnings per share by about 4% next year. If the company reacted by raising iPhone prices, demand would shrink 6% to 8% in 2020, Ives estimated.

Apple already is paying duties on the Apple Watch, AirPods headphones, iMac desktop computer, and HomePod speaker. Some of those levies may be rolled back. The deal presented to Trump on Thursday included a promise by the Chinese to buy more U.S. agricultural goods. Officials also discussed possible reductions of existing duties on Chinese products, according to people familiar with the matter.

Although the Dec. 15 tariffs were averted, the broader trade war has exposed a weakness at the heart of Apple’s business. The world’s largest technology company relies on suppliers and manufacturing partners that are mostly based in China. Apple can’t quickly move production to other countries, so it has counted on a furious White House lobbying campaign this year, led by Chief Executive Officer Tim Cook, to protect its key products from tariffs.

Cook met frequently with Trump this year, and even took criticism for standing beside the president as he blasted the media and House speaker Nancy Pelosi at a Mac Pro assembly facility in Texas last month.

Trump said at that event that it isn’t fair for Apple to be taxed on iPhones built in China given that South Korean rival Samsung Electronics wouldn’t have to pay the duties.

“Cook has become so crucial in these ongoing China negotiations,” Ives wrote on Thursday. Apple “more than any company out there has the most to lose if this tariff war does not see a truce going forward.”

Related: Xiaomi Takes on Apple in Japan with 108-Megapixel Budget Smartphone

Share this article
Open WeChat and scan the QR code