Apple warns Trump’s China tariffs will boost its product prices

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Beyond the core products, Apple said accessories like the HomePod speaker, some Beats speakers, AirPort and Time Capsule internet routers, the Magic Mouse and Magic Trackpad, and leather cases for the iPhone, iPad, MacBook and Apple Pencil would be affected. It said some of the parts it relies on for product development, including processors and research equipment, would also be hit by the tariffs.

In pushing back on the proposal, Apple said it bought more than $US50 billion worth of components from US-based suppliers last year and that it’s the largest US corporate tax payer. It also said that every Apple product “contains parts or materials from the United States and is made with equipment from US-based suppliers.” Earlier this year, the company said that as part of tax reform it would spend $US350 billion in the U.S. over the next five years.

Apple generated $US9.6 billion in sales in China in the fiscal third quarter, accounting for 18 per cent of its total revenue in the period.

Intel, the world’s second-largest chipmaker, weighed in supporting Apple’s opposition to the tariffs and broadening the argument. Computer and phone makers are involved in a global supply chain that includes Chinese manufacturing, and that can’t be easily excluded without harm to US companies, Intel said in a letter to the trade representative.

The US’s ability to continue to dominate telecommunications technology, including the upcoming fifth-generation phone networks, will be hampered by the levy on imports from China, it argued.