Apple could be tax free if it makes products in the US

Marco Green
September 12, 2018

On August 31, Ford announced it was canceling plans to ship the Focus Active to the US from China - citing new tariffs on Chinese imports.

Trump tweeted on September 8 that Apple should build new manufacturing plants in the USA to avoid tariffs on Chinese imports that the United States government is planning to introduce.

Trump declared victory on Sunday, writing: "This is just the beginning". Apple added that computer parts for its USA operations would be hit by the tariffs.

However, it turns out that Ford has no plans to build the Focus Active in America because of the niche model's low projected sales. Simply put, establishing a local production of the vehicle would not make a successful business case.

Trump tweeted over the weekend that the tech giant should manufacture its gadgets in the USA if it wanted to avoid tariffs on Chinese imports, saying an "easy solution" to Apple's problem would be to "start building new plants now". Today, a few different analysts are out with their take on what impact the tariffs will have on Apple, with the analysis ranging from a small impact to a slighter bigger one to, yes, Apple may have to raise some prices as a result. And the negative impact, Apple warned, would be worse in the US than in China. According to the automaker, the levies President Trump is threatening to impose on China-imported vehicles would be simply too much for the company.

For President Trump, this is the second tweet aimed at American companies in two days. It makes many of its products for the USA market in China. Start building new plants now.

Apple outlined how the company's operations and products will be affected by the tariffs. Cook's personal diplomacy stands in stark contrast to some of his peers in the tech industry, who haven't engaged Trump directly - and often are on the receiving end of far more aggressive tweets attacking their business practices.

The company said the tariffs would "show up as a tax on United States consumers" and "increase the cost of Apple products that our customers have come to rely on in their daily lives".

"Without the tariffs, the business case was pretty solid for that model in the United States market", Kim said. Apple may "fractionally" increase production in the USA over the next decade or so, he continued, but he nevertheless expects the US share of Apple's manufacturing to remain small, at less than 10 percent.

Fitness tracker maker Fitbit said increased tariffs would compromise its investments in USA -based innovation. Last month, it added tariffs to another $16bn in Chinese goods and is readying taxes on another $200bn.

Other reports by Click Lancashire

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