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Trump Folds To Tim Cook, Will Shield Apple Watch From Tariff Impact

And just in time for Tim Cook to rollout the new models. How fortuitous.

We were half-joking earlier this month when we suggested that American consumers might finally revolt against the Trump administration’s trade policies if the next round of tariffs on Chinese products ended up driving prices higher for Apple products.

“Will this be the tipping point for a country that suffers from an acute addiction to smart devices?”, we asked on September 7, after reports that the company penned a letter to the government during the public comment period for the prospective duties on $200 billion in Chinese goods, warning that prices for a wide range of Apple products could be affected.

“Maybe America will start reading the writing on the wall when their Apple addiction suddenly becomes more expensive”, we mused.

For those who need a refresher, here is the list of products Apple warned could be impacted going forward:

  • Apple Watch,
  • Apple Pencil
  • Air Pods
  • MacMini
  • Apple adapters, cables and chargers
  • Apple– designed components and made-to-specification tooling for Apple’s U.S. manufacturing and product repair facilities
  • specialty testing equipment for Apple’s U.S. product development labs
  • servers
  • hard drives
  • cables for Apple’s U.S. data centers that support global services such as the App Store

Fast forward to Monday and it looks like the Trump administration is actually going to spare Apple Watch from the pain.

According to two people familiar with the situation, the U.S. will not include smart watches in the list of products affected by the forthcoming duties on $200 billion in Chinese goods. Apple Watches were mentioned specifically in the headlines.

Apple shares pared losses on the news, ticking higher as soon as the headlines crossed:

apple

(Bloomberg)

On September 8, Trump appeared to say he was not prepared to fold to implicit pressure from Tim Cook.

“Apple prices may increase because of the massive Tariffs we may be imposing on China, but there is an easy solution where there would be ZERO tax, and indeed a tax incentive”, Trump tweeted, before imploring Apple to simply make everything in California:

Make your products in the United States instead of China. Start building new plants now. Exciting! #MAGA

Obviously, that’s no doable. If Apple were to go that route, prices for their already expensive products would invariably soar.

So, it looks like our tongue-in-cheek suggestion that messing with America’s Apple addiction might be a bridge too far was actually some semblance of accurate.

And just in time for Tim Cook to rollout the new models. How fortuitous.


 

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