Business

Trump has a solution to Apple's price hike dilemma-shift manufacturing from Beijing to Washington

Written by PaperDabba
Image Source : FILE

US President Donald Trump with Apple CEO Tim Cook.

US President Donald Trump has offered a ‘perfect’ solution to Apple after it hinted at increasing the price of products owing to tariffs on China- shift manufacturing from Beijing to Washington.

“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 on Saturday.

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

Earlier in a letter written to the Trump administration, Apple had said that the proposed $200 billion tariffs on China-made products will make the Apple Watch, AirPods headphones, HomePod smart speaker, Macs and key computer parts more expensive.

In January 2017, Trump said he spoke to Apple CEO Tim Cook over the phone and he promised to build “three big plants” in the US. 

But Cook never directly responded to that claim.

What Apple actually announced in January was to contribute $350 billion to the US economy over the next five years that includes an estimated $55 billion investment in 2018.

In a letter written to the US Trade Representative on Friday, Apple said some of its popular products will get hit by the 25 per cent increase in import tax as proposed by the Trump administration on Chinese products.

Other products are Magic Mouse, Magic Trackpad, Apple Pencil, Apple adapters, chargers, cables and cords, Apple main logic boards with microprocessing units, memory modules, video graphic/audio cards and PCBAs, Apple computer parts (e.g., housings and internal components) and printed circuit boards, among others

“Because all tariffs ultimately show up as a tax on US consumers, they will increase the cost of Apple products that our customers have come to rely on in their daily lives,” Apple wrote in the letter.

According to a report in The Verge, Apple asked that the US revise its proposal and decline to place tariffs on the product categories that cover these devices.

The company’s hardware products have taken it to become a $1 trillion company but those products are built in China which also creates thousands of jobs.

Apple is set to unveil new iPhones and other services on September 12.

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