US President Donald Trump called on Apple to produce its products on American territory instead of China to avoid the consequences of the trade war with Beijing.
“Apple prices could increase because of the huge duties that we can impose on China, but there is also an easy solution, involving zero taxes and even tax concessions,” wrote Trump in his favourite social channel – Twitter.
The administration of Trump imposed penalty duties on Chinese goods for $50 billion and threatened to impose duties on all Chinese imports. Beijing replied reciprocally, creating a commercial resistance with a broad surround and stake of billions of dollars.
According to Apple, the trade war with China and an additional 25% duty will lead to an increase in the price of the components used in smartphones, as well as the reduction in sales volumes and growth. The process will cover a wide range of Apple products. These include smart watches, wireless headsets, Mac mini, Apple Pencil stylus and a number of company accessories, all of which are traditionally expensive anyway.
Apple is not the only company that is worried about the impact of the complicated international relations on its business. CISCO, Dell, Hewlett Packard Enterprise and Juniper Networks also expressed concern that customs duties on Chinese network equipment directly and disproportionately would harm their own businesses and the US economy as whole. In an open letter to US Trade Representative Robert Lighthizer, they say customs duties will mainly affect US consumers and delay the development of US Internet and cloud infrastructure, as many key hardware parts are affected by the customs duties. Job losses and market value will make US technology companies less competitive vis-à-vis their Chinese rivals – the opposite of the set objective of the series of policies.
The goods affected by the new policy are key not only for CISCO, Dell, HP Enterprise and Juniper, but also for Facebook, Microsoft, Amazon and Google, who are currently enjoying a boom of their market capitalisation while competing in the creation of cloud platforms.
