• Home
  • Apple
  • China and U.S. Reportedly Reach Trade Deal, Allowing Apple to Avoid 15% Tariff on Its Products

China and U.S. Reportedly Reach Trade Deal, Allowing Apple to Avoid 15% Tariff on Its Products

China and U.S. Reportedly Reach Trade Deal, Allowing Apple to Avoid 15% Tariff on Its Products

Apple seems to have dodged a huge tariffs bullet, as the United States and China have reportedly reached a limited trade deal, which should ease tensions between the two nations, avoiding new tariffs and hopefully rolling back some existing ones.

A new round of 15% tariffs was set to go into effect on Sunday if the two countries failed to make a deal. That would have resulted in added tariffs on numerous Apple products, including the iPhone, iPad, and the MacBook. Such tariffs would likely have had a chilling effect on Apple’s sales during the all-important holiday shopping season.

However, Bloomberg reports an investor note this afternoon by Wedbush analyst Dan Ives indicated that Trump has delivered an “early Christmas present to Apple.”

“Trump delivered an early Christmas present to Apple. If this tariff went through it would have been a major gut punch for semi players/Apple and could have thrown a major wrench into the supply chain and demand for the holiday season.”

Ives estimates Apple earnings per share would have taken a 4% hit if the company itself had absorbed the tariffs, and if the company had raised prices to account for the additional 15% hit, demand for their products could have dropped by as much as 8%.

Apple was already paying tariffs on many of its products, including the Apple Watch, AirPods, iMac, and HomePod. It’s currently unclear if those tariffs will be rolled back.

The New York Times reports that the trade agreement has yet to be officially announced, meaning many of the details are unknown at this point.

Leave a Reply

Your email address will not be published. Required fields are marked *