Apple Makes a Case for Tariff Waivers on iPhone Components, Apple Watch, HomePod

iPhone 11 Pro Deep Fusion Tested

Apple has once again sought tariff waivers from the United States government. The Trump administration has imposed a new tariff on Apple Watch, AirPods, HomePod and other parts/devices imported from China. The new tariffs have been into effect since September 1.

Tim Cook has already confirmed that Apple is paying newly imposed tariffs on some of its products. Apple also said that they are hopeful that America and China will put an end to the ongoing trade war. Apple has filed for exclusion on as many as 11 products/components. The company puts forth its argument that it is unable to find a source outside of China that will be able to meet the demand for products/components.

A few months back, Apple had considered shifting Mac Pro production from Texas to China. However, the company seems to have buckled down to the pressure and announced that it will continue making new Mac Pro at a plant in Texas. However, Apple was successful in getting tariff exclusion for some of the parts/components that go into Mac Pro.

Our Take

This is not the first time Apple has requested the government for tariff exclusions. The merit of exclusion is typically judged on the basis of whether the component is exclusively available in China. Authorities also examine whether duties will “cause severe economic harm” to the U.S interests.

Contract factories that make components for various Apple products are concentrated in China, with 47.6% of factories located in the country. While some of the component makers do have their factories in Brazil and India, they are only meant to meet local demand. In other words, it is not easy for Apple to move production out of China.

[via Bloomberg]