The ongoing trade war between the US and China has taken a new turn. The United States Trade Representative office has announced that new tariffs will be delayed until Dec 15. Earlier, the duties were set to be applied on Sept 1 and now it has been delayed further to December.
As per the authorities, the delay will affect electronics like laptops, smartphones, video gaming consoles, and select clothing. The news in the delay of customs caused a 5% hike in Apple share prices. Trump told reporters that the delay aimed at shielding US shoppers during the holiday season. Interestingly, the announcement was made right after China’s Ministry of Commerce made a phone call to U.S trade officials.
The sentiment was widely reflected on Wall Street as three share indexes rose by nearly 2%. Trump had announced in August that he will impose 10% tariff on $300bn worth of goods imported from China. He also blamed China for breaking the promise of buying more agricultural products from the US. Financial institutions have been hinting at a recession following the escalating trade war. As of now, it seems like the trade war will not push the market further down.
Apple imports a majority of components needed for iPhone from China. In fact, Foxconn’s facility in Zhengzhou is the world’s biggest iPhone factory. The city of Zhengzhou has rightly earned the name ‘iPhone City.’ A recent report spoke at length about how Apple was planning to absorb the increase in input cost due to newly imposed tariffs.
Foxconn officially confirmed that its factories outside China are capable of catering to the demand in the U.S. Outgoing Foxconn President Terry Gou also suggested that Apple can shift the facility to Taiwan. The bottom line is that consumers will not have to bear the brunt of tariff increase anytime soon. The 2019 iPhones are expected to be launched next month, check out our rumor roundup to know more.[via BBC]