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The deal between the US and China avoids the rise in price of iPhone by $ 150

13.12.2019 0 Comments

The deal between the US and China avoids the rise in price of iPhone by $ 150

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U.S. President Donald Trump's preliminary trade agreement with China, announced yesterday, saved Apple from higher prices for its products, including the iPhone.

If the parties were not able to reach an agreement, then a fee of 15% would begin to apply to Apple devices. As a result, the price of the iPhone 11 Pro would increase by about $ 150. The new duties were supposed to take effect on December 15 and would affect iPhone smartphones, iPad tablets, the MacBook line of laptops, as well as other products of the company.

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According to analysts, if the deal between the US and China failed, and the duties would take effect, this would be a serious blow to Apple and other companies. The entry into force of duties would affect both the entire supply chain and demand during the holiday season. Apple itself declined to comment.

The trade and economic war between the United States and China, which Trump has been waging since the first months of his tenure in power, sharply escalated last year. This has affected dozens of products of American companies, which are mainly produced in Chinese factories. Apple was perhaps the largest and most famous among the affected companies, given the huge scale of its activities in China and Apple's close ties with Beijing.

While Apple is developing contingency strategies, such as moving production to other countries such as India and Vietnam, CEO Tim Cook has repeatedly called on Trump to either exempt Apple products from new duties or make a deal that will end the escalation. Just such a deal was concluded. However, earlier Trump sometimes publicly rejected Apple's requests for certain products and components. In September, the company faced another 25 percent duty on components needed to manufacture its new Mac Pro. This happened after the office of the US sales representative rejected another request for exemption of the company from duties.

According to Bloomberg, Apple also bears the burden of duties on products such as Apple Watch, AirPods, iMac desktop computer and Smart HomePod speaker. But duties on these products can also be canceled as part of a preliminary bargain. So far, Apple has not raised the price of any of its products due to the trade war. But analysts suggest that if the situation does not improve for the better, then it will have a noticeable negative impact on Apple's profits.

Source: The Verge

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