As President Trump threatens to add $200 billion in tariffs on Chinese goods, Apple is now saying that these tariffs will affect Apple Watch and AirPods as well as adapters and chargers for a host of products. However, it is important to note that Apple CEO Tim Cook had previously brushed off tariff concerns. This news triggered selling in Apple stock, causing it to fall 1 percent just before the Friday close. The tech giant said in a letter to the US trade representative that the tariffs aimed at China would cover a wide range of Apple products. However, the impressive and wide margins as well as cash flow would absorb higher costs – but in the end, the consumer just might be forced to pay more for products as a result. This is coming from the company.
Last quarter, Apple earned $11.5 billion on sales of $53.3 billion, with the firm reporting more than $243 billion in cash and equivalents. This highly visible tech firm recently saw its market cap surpass $1 trillion dollars. And note that the company posted revenues exceeding $200 billion this year, beating Wall Street estimates in 21 of the past 22 quarters. Still, Apple did not offer an estimate on how much new tariffs would increase costs.
China produces tech products at all levels of the food chain now. So any tariff that is attached will clearly impact at least some parts of “US built tech” and as a result, pass on costs to the consumer. AirPods, Apple Pencil, as well as HomePod and Mac Mini will all be impacted by new Trump tariffs according to the firm.