The US is introducing new tariffs: Apple may raise prices on its products - NYT
Kyiv • UNN
The US is imposing high tariffs on goods from Vietnam, India and China, which will increase Apple's costs. The company may raise prices on iPhones, iPads and Apple Watches or suffer financial losses.
The US is imposing high tariffs on goods from Vietnam, India and China, which will significantly increase Apple's costs. The company will either suffer financial losses or raise prices for iPhones and other devices. This is reported by The New York Times, writes UNN.
Details
According to a White House statement, the US is imposing tariffs of 46% for Vietnam and 26% for India. These countries have become major manufacturing sites for Apple after the company began reducing its dependence on China due to previous trade restrictions.
The proposed tariffs could put pressure on Apple's business. The company is already dealing with 20% tariffs on products imported from China, where Apple manufactures about 90% of iPhones sold worldwide. Trump said the rate would rise to 34% under his new tariff plan.
The new tariffs are part of Trump's effort to reshape world trade through tariffs for every country that charges tariffs on US exports. US trade officials estimate that India's tariff rate on US goods is 13.5% and on agricultural products - 39%. Vietnam's tariff rate on US goods is 8.1% and on agricultural products - 17.1%.
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The costs of "reciprocal tariffs", as Trump calls them, could put Apple's business in a stalemate. The iPhone, iPad and Apple Watch that the company sells bring in three-quarters of its nearly $400 billion in annual revenue. Amid Trump's statement that he would not allow products to be exempted from tariffs, Apple will either have to pay those tariffs, which will reduce its profits, or raise prices for its products.
According to Morgan Stanley, tariffs on iPhones and other devices imported from China will increase Apple's annual costs by $8.5 billion without any relief from the Trump administration. This will reduce the company's earnings in the next year by $0.52 per share, or about $7.85 billion. This will be approximately 7% of next year's profit.
Apple shares fell 5.7% in secondary trading after Trump's statements.
"Apple will take these new tariff figures and plug them into the models they've created, and within hours will know how big their problem is," said Anna-Katrina Shedletzky, founder of Instrumental, a Bay Area company that uses artificial intelligence to improve manufacturing productivity. She previously worked at Apple.
After Trump took office, Apple CEO Tim Cook pledged that Apple would invest hundreds of billions of dollars in the United States. In February, Apple fulfilled that promise by pledging to invest $500 billion in the country, with most of that money already part of its spending plans.
