US-China Trade War Forced Businesses to Shut Down, Could Apple Be Next?
It’s hurting us as consumers – this is the bottom line of the ongoing trade war between the United States and China. At the mere sight of this news, it surely will prompt you to scratch your head because it’s quite confusing and messy.
As you’ve noticed, both countries are regarded as giants in terms of economy, so why are they bickering? The shortest answer is this: both have accusations against the other and the only ones left to suffer is the consumers.
What’s Going On?
If you are wondering, negotiations are ongoing although it seems that neither of the two is willing to let go and back off. As a result, both the US and China have slapped each other by imposing tariffs on billions of goods of each other. This banter only leaves the businesses and brands hanging, quite unsure of how they will take a blow.
So, the adverse effects may ultimately trickle down to us – because there are higher taxes imposed on products imported, the price would have to cover the additional expenses, if not covered by the brand, and therefore, we would be forced to shoulder additional amounts.
That definitely sounds scary. This all started last year around March when the United States announced it would be imposing tariffs on steel and aluminum imported from the Asian country and as expected, China retaliated by doing the same thing. If you thought you have not purchased anything from the most populous country in the world, then look at your Apple product.
Most of the tech giant’s gadgets are assembled in China by Foxconn and with the recent 15 percent tariff slapped on $112 billion Chinese imported goods, the Apple Watch, Homepod, and Airpods are affected. iMac computers and storage components for the cellphones of the brand are also affected. What does this mean?
Apple could just absorb the high tax or put the burden onto the buyers’ shoulders, which means the products would come with a heftier price tag. CEO Tim Cook has early on expressed his concern over how the tit-for-tat tariff imposition could greatly affect the Cupertino, California-based company, even meeting with the president of the US to argue that its number 1 competitor Samsung would greatly benefit from this since its products come from South Korea.
While this may be the case, some analysts believe that Apple can weather this storm. Samik Chatterjee of J.P. Morgan sees the brand’s timing that would allow it to navigate through the obstacle that’s impressive than how investors expect things to be.
The said silver lining will be the time when the next batch of iPhone will be released, which is this September — iPhones have yet to be nudged by the recently imposed taxes but is believed to be affected by Dec. 15 – plus, as per the firm’s estimation, the phones account for 55 percent of the sales.
Tom Forte of D.A. Davidson, meanwhile, echoed the same sentiment and said the company believes the situation isn’t as bad as it seems. He also praised Apple for how it is mitigating the tariff impact by trying to work with the US government.
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