Here we go again, Trump plans to impose 25% tariff on phones made outside of the US
It's anybody's guess why Trump is so insistent on bringing phone manufacturing to the US.
#tariffs #tradewar #iphone #galaxy
US President Trump wants phones sold in the country to be made domestically. Photo: HWZ
More than a month after backing down on phone tariffs, US President Trump says he is now considering a 25% tariff on all phones made outside the country.
Trump initially warned Apple that iPhones would be subjected to the new tariffs if they were not "manufactured and built in the United States".
In response to a reporter's question about whether he had the power to impose tariffs on a single company, Trump claimed "it would be more" and said the tariffs would apply to Samsung and any other company selling phones in the country that were not manufactured domestically. Calling it a fair practice, Trump added that he plans to implement the new tariffs by the end of June.
During its recent earnings call, Apple CEO Tim Cook shared that tariffs would add an estimated US$900 million to their costs. Cook also said that most iPhones sold in the US would come from India.
A Financial Times report predicts that all US-bound iPhones could be made in India by the end of next year. It is widely seen as a strategic move to minimise exposure to the ongoing trade tensions between the US and China.
It remains to be seen if Apple and the other phone makers can negotiate with the Trump administration to gain some concessions. The possibility of phone manufacturers moving their production lines to the US remains low since several hurdles exist. Apart from requiring significant investments in facilities, the US lacks the expertise in the type of manufacturing needed to make high-end tech devices. Moreover, even if it were possible, it would almost certainly mean higher phone prices.
Source: 9to5Google
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