Tariffs are nothing more than an import tax levied on companies that ship products to the U.S. Thus, if higher tariffs are imposed on China,
Apple, and its customers, would be forced to pay an additional import tax on devices assembled in China and delivered to the U.S. While Apple would be responsible for paying the tariff (not China) if the company felt like it, it could decide to pass the additional cost on to U.S. consumers. Because Musk and Cook can get themselves on Trump’s good side, Munster says that Apple and Tesla might be able to avoid tariffs imposed on China.
Starting with Trump’s first term, Cook has been able to sell Trump on the premise that tariffs affecting Apple will help Samsung’s U.S. business. And you know what? Cook is not wrong.
Samsung manufacturers most of its products in South Korea, not China, and unless Trump imposes tariffs on South Korea, Samsung would have a huge advantage in pricing its products heading for the U.S. During the presidential campaign, Trump spoke constantly about how he would impose tariffs on several countries and called “tariff” the most beautiful word in the world.
“Apple and Tesla will receive tariff waivers (if Trump executes his proposed China tariffs) – Make no mistake, increased tariffs are coming for many manufacturers, but Apple and Tesla will be spared high tariffs – Trump doesn’t want Tesla to lose to BYD or Apple to lose to Samsung.”-Gene Munster, Managing Partner, Deepwater Asset Management
During Trump’s first term in office, the president-elect did bend over backward to keep the iPhone from being hit by tariffs charged on shipments to the U.S. from China. Just before the iPhone was to be included in a group of products from China about to be hit with higher import taxes,
Trump signed a trade deal with China in December 2019 allowing the iPhone to escape any tariff-related charges in the states.
Some devices such as the Apple Watch and AirPods were among certain tech products built in China that Apple had to pay higher taxes on when shipped to the U.S. during Trump’s first term. Luckily for American consumers, the company ate the additional costs itself and the public did not have to reach deeper into their wallets to buy these products.
There is also the possibility that Trump could change his mind about protecting Apple and the iPhone. The president-elect would consider it quite an accomplishment if he could somehow force Apple to move more of its iPhone manufacturing out of China and into India, or other countries such as Vietnam. While Apple has been reportedly working on plans to shift its manufacturing out of China and into other countries, this won’t happen if Apple continues to get special favors from Trump such as tariff waivers.
