Get ready to pay more for your next iPhone as Trump announces plan to hike tariffs on China
Get ready to pay more for iPhones or other tech products imported from China. A post written by President-elect Donald Trump on his Truth Social platform says that he will use an executive order on the first day of his second term to hike tariffs on China by 10%. In the "Truth" Trump sent, he blamed the tariff hike on the "massive" amounts of fentanyl that are being sent from China to the U.S.
Trump wrote, "Until such time as they stop, we will be charging China an additional 10% Tariff, above any additional Tariffs, on all of their many products coming into the United States of America." The only problem with this statement is that the tariffs are going to hurt U.S. companies and consumers more than they hurt China and Chinese companies. You see, tariffs are import taxes and neither Chinese companies nor the Chinese government pay for them.
Tariffs against China are paid by the U.S. companies that import goods from China, like Apple for example. And if these companies don't want to be totally responsible for the additional costs of paying the import tax, they can decide to raise prices on the affected products which means that U.S. consumers will be paying more. The only way that the tariffs can impact China is if the U.S. companies importing from the country decide to take their business elsewhere.
President-elect Trump announces an additional 10% hike on tariffs imposed on products imported to the U.S. from China. | Image credit-Truth Social
During the U.S.-China trade war during the first Trump administration, Apple was able to escape a 15% tariff on the iPhone that was supposed to go into effect on December 15th, 2019. The two countries reached an agreement on the "first phase" of a plan to de-escalate the trade war before the higher tariff on the iPhone was imposed. Apple did have to pay higher tariffs on some of its products such as the Apple Watch and AirPods. But the president-elect has always held a soft spot for Apple and the iPhone and Apple CEO Tim Cook has flattered Trump with the latter accidentally referring to Apple's CEO as "Tim Apple."
The president-elect's Truth Social post is interesting because during the campaign Trump talked about slapping a 60% tariff on China which indicates that this time around perhaps more thought is going into Trump's decisions instead of shooting from the hip. Regardless, Apple continues to look for ways to move production of the iPhone out of China and has increased the number of iPhones being made in India.
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