US technology companies, particularly Apple suffer losses of $10bn due to the trade war.
The escalating trade war with China has cost US technology companies losses of $10bn since July so far, a specialized report revealed, noting that this figure is likely to increase during September, as the new batch of tariffs imposed on Chinese imports of $300bn will take effect.
The escalating conflict between the two largest economies in the world entered a new phase yesterday, where the US citizen will directly feel the impact of new tariffs targeting products worth billions of dollars, including many electronic products of various forms, CNBC reported.
“Eventually, this will end up raising prices on gadgets and other products for people in the United States, said Bronwyn Flores, a spokeswoman for the Consumer Tech Association (CTA), a trade group that represents 2,000 different companies in the electronics industry, including brands like Apple and LG and retailers like Walmart and Best Buy.
“You’re not likely to see price increases for consumers starting Sunday,” Flores told CNBC. “But you might start to see it in November for Black Friday, so if you want a new TV for the Super Bowl, you might want get it soon.”
“You’re going to start to see these price increases this holiday season,” she continued. Flores explained that the list of products subjects to the new tariff batch starting yesterday includes popular consumer products, such as smart watches, computers, digital cameras and sports equipment, with an estimated value of $52bn.
The CNBC report also pointed out that the giants of US technology companies are not isolated from the new tariffs, pointing out that the current Apple-led battle for exempting its products from the imposed fees crystallizes the challenges faced by the American companies due to the escalating US-China trade war.
In June, Apple sent a letter to the government stating that the inclusion of a number of its main products under “List 4a”; to be subject to new tariffs, such as iPads, iPhones, iMac, and iPod will reduce the contribution of the leading company in the US economy, the report referred.
Analysts at JPMorgan say that Apple is more likely to absorb the cost of additional tariffs it will have to pay to the US government to bring products assembled in China as it is too large to be offset by higher prices for its products to the consumer, and thus the losses could reach $500mn, Asharq Al-Awsat reported.
The growing tariff war between the United States and China is threatening the interests of Apple, the technology giant is the latest to join the list of victims of the trade war between the world’s largest economists, which is threatening to raise prices on popular consumer gadgets and undermine one of the global supply chains.
“If the United States adds tariffs to any of Apple’s products, without any compensation in return to mitigate the negative effects of that move, it will have chosen the path of no return,” Bloomberg quoted Jane Munster, analyst at Lop Ventures, as saying.
“We believe that the United States does not want to impose tariffs on Apple, given the company’s position as a leading US company and representative of the US business in China,” Munster added.
For its part, Bloomberg said that it is unlikely that Trump will give Apple a period of planned tariffs, pointing out that the US president has not shown any kind of retreat or calm in his positions, but he preferred to blame US companies, because of its inability to adapt its conditions or adapt to its trade policies aimed at achieving commercial justice, or undermine the ability of “unfair players,” as he described.
Bloomberg listed some of Apple’s targeted products in the batch of new tariffs, including Apple Watch, iMac computers, Apple AirPods, parts of the iPhone smartphone, and other products, which accounted for at least 10% of the company’s revenues last year, pointing out that the iPhone, which accounts for more than half of the revenues of the US company, will not be subject to such tariffs until mid-December.