Trump tariffs may jack up Apple Watch prices by 20%

Ivan Schwartz
September 11, 2018

According to CNBC, BofA noted that a 25 percent tariff "could be materially demand destructive" and estimates that about a third of the $26 billion it earns from those products comes from the United States.

China's annual consumer inflation accelerated to 2.3 percent in August, the fastest pace since February this year and beating expectations, official data showed on Monday.

Building the auto may still be the plan, but not in the USA, she said, as did other analysts. Apple may "fractionally" increase production in the US over the next decade or so, he continued, but he nevertheless expects the USA share of Apple's manufacturing to remain small, at less than 10 percent.

Loup Ventures analyst Gene Munster predicts the tariffs would only cause Apple's revenue to drop by 5% in 2019 because the amount of money the affected products make is such a small slice of the company's money-making machine.

Ford won't shift production of the Focus Active from China to the United States, dashing the hopes of President Donald Trump. Previously, Trump assured Apple that it would be safe from his trade war with China.

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Then, after Trump started threatening his new tariffs against China, Ford decided in August that it wouldn't sell the Focus Active in the US after all.

"Our concern with these tariffs is that the USA will be hardest hit, and that will result in lower US growth and competitiveness and higher prices for US consumers", Apple wrote in the September 5 letter.

China's government says it will retaliate if Washington goes ahead with more tariff increases following President Donald Trump's comment that he was considering extending penalties to more Chinese imports. Of course, by the time Apple could build plants to accommodate the manufacturing, it would already be way late. Earlier this year, however, the company announced a major shift in focus (no pun intended): It would begin phasing out virtually all of its cars in the US, while doubling down on trucks and SUVs. That is why companies like Ford cannot sell their vehicles, which they make overseas, in the U.S. "As a result, tariffs will ultimately reduce the economic benefit we generate for the United States", Apple said. More broadly, tariffs will lead to higher US consumer prices, lower overall USA economic growth, and other unintended economic consequences.

Ford, however, has no plans to move production to the United States. It's too costly to build that vehicle here and they weren't planning to.

The Ford Focus Active, a small crossover vehicle now sold in Europe, was slated to begin production in China for the US market.

Other reports by GizPress

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