The trade war between China and the US keeps getting worse. President Trump has announced that starting from September 1, the US will put a “small” tariff of 10% on the remaining 300 billion dollars of good that are imported into the country.
This excludes the $250 billion goods already coming into the U.S. from China on which a 25% tariff has been levied. The 10% tariff will end up impacting a large number of consumer goods and electronic appliances which are imported from China. This even includes iPhones, MacBooks, and other products that Apple sells in the United States.
…We look forward to continuing our positive dialogue with China on a comprehensive Trade Deal, and feel that the future between our two countries will be a very bright one!
— Donald J. Trump (@realDonaldTrump) August 1, 2019
So far, the 25% tariff imposed by the US on goods imported from China mainly affected accessories like chargers and cables. But this 10% tariff will affect all popular consumer items like iPhones, toys, sneakers, and more which are imported from China.
Some of the companies are likely to absorb this 10% duty while others will pass it on to consumers. It is unclear if Apple will adjust its iPhone prices to account for this tariff or not. Apple supplier Foxconn had already confirmed that its factories outside of China were already capable of meeting the iPhone demand in the US.
Trump explained in a series of tweets that China backed away from many of the trade deals which led to him making this decision. The President believes that by taxing Chinese goods, U.S. companies would be forced to move their production out of China. While this may happen in the long term, US consumers and companies are the ones who will have to bear the brunt of this tariff for the near future.