If you’ve ever wondered why Apple’s Tim Cook has tried to remain on good terms with Donald Trump, it’s for times like these.
Trump told the Wall Street Journal Monday that it’s possible the U.S. will apply new tariffs to Chinese-made consumer tech products like the iPhone. The new tariff could be either 10% or 25%, the president said. His comments come four days before he will meet Chinese leader Xi Jinping for trade talks.
Trump had promised Cook that he would not place tariffs on Apple products, the New York Times reported in June, and Apple devices missed the first round of tariffs applied by the Trump administration in September, but the company’s luck might not hold. If the iPhone were subject to a 10%-25% tariff, consumers would bear most of the extra cost. And Apple has already been pushing the envelope on the (high) prices of its flagship iPhones. The iPhone accounts for about 60% of Apple’s revenues.
Other Apple products assembled in China, like AirPods, the MacBook Pro, iPad, and Apple Watch, could also be subject to the new tariffs.
Apple’s stock fell 1.8% in after-hours trading on Trump’s comments.
As of September 24, about half of all Chinese products coming into the U.S. were subject to a 10% tariff. The tariff is scheduled to rise to 25% on January 1st. China’s main goal in the upcoming negotiations is convincing the U.S. to hold off on increasing the tariff on $200 billion of Chinese goods to 25%. Trump told the Journal it is “highly unlikely” the U.S. will be convinced.