President Trump’s Tariff on Imported Aluminium and Steel Could Make Apple Products Costlier in the US

Apple iPhone 7 Plus

Donald Trump, the President of the United States, has revealed that he plans to impose a 25 percent tariff on imported steel and 10 percent on imported aluminum. The President is interested in taking this move so as to protect local companies in the US. He will be signing the order next week and has promised that it will remain in effect for a long time.

While this move from the President will affect the auto and aerospace industry the most, it will also have an impact on the final prices of Apple products. The move has not gone down well with members of the Republican Party, with many companies also criticising it.

Trump has not provided much details about his plans. It is unclear if he will be levying the tariff only on imported raw materials or on the finished goods. If it’s the former, then the price impact on Apple products would be minuscule as per analyst Gene Munster. This is because Apple assembles almost all of its products in China and then imports them in the United States. The company only manufacturers the Mac Pro in Austin, Texas, but even that is produced in limited numbers. But if Trump’s administration imposes the tariff on the finished goods, then analyst Gene Munster believes it could lead to prices of Apple products increasing by 0.2 percent. The tax will be levied on the amount of aluminum or steel used by Apple in their products and not on the total price of the device it sells.

Given that the price increase we are talking about here is very small, it is possible that Apple might just end up absorbing the impact of the taxes. If not, we should see a very marginal increase in prices of Apple products in the United States.

[Via Bloomberg]