Apple asks U.S. for exemption from tariffs on Apple Watch, AirPods and more

Prior to September 1st, Apple was barely exposed to the Trump administration’s import tax on products imported into the U.S. from China. Certain cases for the iPhone and iPad were subject to the tax because, like most Apple products, they were designed in the U.S. but assembled in China. The U.S. has traditionally run a large trade deficit with China because U.S. consumers have more disposable income than their Chinese counterparts, and can afford to buy a larger amount of goods from China than their consumers buy from the states. But U.S. President Donald Trump equates such a deficit with “losing” even though most economists disagree.
Two of Apple’s red hot wearables are getting socked with a 15% import tax
- Apple Watch
- AirPods/Beats wireless earbuds and charging cases
- iPhone parts including battery and smart battery case
- iMac, storage for Mac Pro, battery for MacBook
- Beats Pill+ wireless speaker
Apple says in the filing that it cannot find a source outside of China than can supply it with the parts it needs for the coming year. The decision on whether to waive the tariff on a Chinese import is based on whether the product can be sourced from other countries, or if it is considered important to Chinese industrial production. Also taken into consideration is whether the tariffs will cause “severe economic harm” to the company (in this case Apple) or the U.S. Last year, Apple sought exemptions on 25% tariffs that were set to be charged on 15 components for the MacBook Pro. The company was denied relief on five of the components, but was able to avoid paying the import tax on ten of them. Last month, Apple announced that it would produce Mac Pro computers at a facility in Austin, Texas that it has owned since 2013.
The Trump administration was also planning on taxing smartphones imported from China on September 1st. But to keep prices from potentially rising during the Christmas holiday season, the 10% tariffs on some consumer products, including smartphones, will kick off on December 15th instead.