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Apple Watch, FitBit could feel the heat of President Trump’s China tariffs

Apple Watch, currently set to face a 10% import tariff on arrival from China, will be collateral damage in trade war with Beijing
Apple watch
Bernstein analyst Toni Sacconaghi estimates the Apple Watch will bring in US$9.9bn in sales this year

While Apple Inc’s (NASDAQ:AAPL) iPhones, iPads and Macs should be exempt, the Apple Watch is one of several devices currently slated to fall foul of the Trump administration’s belligerent trade war with China.

The Trump administration on July 10 released a list of 10% tariffs on US$200bn in Chinese goods, and Apple Watch, health trackers, streaming music speakers and other accessories assembled in China could feel the blowback, government rulings on tariffs show.

“The rulings name Apple's watch, several Fitbit activity trackers and connected speakers from Sonos Inc,” reported Reuters.

READ: Trump’s Trade War: Who’s in the firing line?

“While consumer technology's biggest sellers such as mobile phones and laptops so far have faced little danger of import duties, the rulings show that gadget makers are unlikely to be spared altogether and may have to consider price hikes on products that millions of consumers use every day,” added the report.

Collateral damage

The specific products listed in customs rulings are the original Apple Watch; Fitbit's Charge, Charge HR and Surge models; and Sonos's Play:3, Play:5 and SUB speakers.

The tariffs will not go into effect immediately but will undergo a two-month review process, with public hearings from August 20-23.

That US$200bn list of tariffs is in a public comment period, but if the list goes into effect in the Fall, the products from Apple, Fitbit and Sonos could face a 10% tariff.

Bernstein analyst Toni Sacconaghi estimates the Apple Watch alone will bring in US$9.9bn in sales this year, though that estimate includes sales outside the US that the tariff would not touch.

iPhone escapes being on tariff list for now

In the trade showdown, Apple, which has 41 stores and a chunk of its manufacturing anchored in China, has much to lose.  

For now, it appears Trump isn’t going to punish the iPhone in his escalating trade war with China. The New York Times earlier reported that the Trump administration assured Apple CEO Tim Cook that the iPhone would not be on the list of tariffed goods, citing a person familiar with the matter.

Cook met with Trump in May to dissuade him from levying tariffs against goods manufactured in China, citing the damage such a trade war would do to American companies.

Three radical new iPhones

Meanwhile, spotted by Consomac, Apple has chosen to publicly file identifiers for all its new iPhones in the Eurasian database, and it confirms three distinct designs will be coming to market.

“In its filing, the Eurasian database lists all the devices as running iOS 12 - the next generation of iOS which Apple historically launches alongside new iPhones every September,” reported Forbes.

Shares in Apple were trading slightly higher Friday at US$192.18.

Contact Uttara Choudhury at [email protected]
Follow her on Twitter: @UttaraProactive

 

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