Trump tells Apple to make items in US

US President Donald Trump tweeted on Saturday that Apple Inc should make products inside the US if it wants to avoid tariffs on Chinese imports.

The company told trade officials in a letter last week that the proposed tariffs would affect prices for a “wide range” of Apple products.

Trump, speaking on Friday aboard Air Force One, said the administration had tariffs planned for an extra US$267 billion worth of Chinese goods.

Trump tweeted that “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. Make your products in the United States instead of China. Start building new plants now.”

Apple declined to comment.

A “wide range” of Apple Inc products including the Apple Watch would be affected by proposed US tariffs on Chinese goods, the company told US trade officials, but gave no sign of an impact on its iPhone cash cow.

Apple did not disclose specific revenues for most of the affected products, but of those the Apple Watch may be the biggest seller. It brought in about US$6.1 billion in revenue last year, according to an estimate from analyst firm Bernstein. That represents a small portion of Apple’s US$229 billion in overall sales.

Apple laid out the impact on its products of the Trump administration’s proposed tariffs on US$200 billion worth of Chinese goods in an unsigned letter it submitted to the Office of the US Trade Representative as part of a public comment period.

Cell phones, the biggest US import from China, have so far been spared, but would be hit if Trump activates the new US$267 billion tariff list.

AirPod headphones, some of Apple’s Beats headphones and its new HomePod smart speaker also face levies as part of the proposed tariffs on US$200 billion worth of Chinese goods, according to the letter.

“Our concern with these tariffs is that the US will be hardest hit, and that will result in lower US growth and competitiveness and higher prices for US consumers,” Apple said in the letter.

Apple argued that the way US trade officials calculate the US trade balance — attributing the entire value of a product to a country like China where final assembly happens — fails to reflect the true value that Apple generates in the United States. The company noted it spent US$50 billion with 9,000 US suppliers in its most recent fiscal year, including Texas-based chip firm Finisar Corp and Kentucky-based Corning Inc.

“Given the balance of Apple’s economic footprint, the burden of the proposed tariffs will fall much more heavily on the United States than on China,” Apple said in its letter.

The technology sector is one of the biggest potential losers in the proposed US$200 billion tariff list. Fitness tracker maker Fitbit said it would be hit by tariffs, and chipmaker Intel Corp said the levies could slow down the adoption of 5G networks.