The Trump administration, in its ongoing trade war with China, has instituted stiff tariffs that will become active on September 1st. The toll the government levies will affect Apple the hardest out of all the tech companies since many of their raw materials come from mainland China. The expected list of affected products is expected to include some versions of Beats headphones, AirPods, the Apple Watch, iMacs, as well as an assorted range of cameras, optical disks, and flash storage.
Not The End Just Yet
China’s belligerence to negotiate with the US government has made enacting these policies and seeing that they are enforced a necessity. However, while the superpower governments duke it out on the world stage, the consumers are left suffering price hikes in a range of electronic devices. The US has become used to cheap electronics, and these price increases will likely price many consumers out of the market. The latest round of tariffs is slated to increase prices by 15%, with another series of tolls to be levied in December if negotiations fail to bring a solution before then.
Will Tech Companies Absorbing Price Fluctuations?
It’s uncertain whether Apple and other tech companies will absorb the costs of devices going forward. For US customers, buying tech may become more of a hassle as the prices continue to rise because of the government’s insistence on provoking China. Without local or regional sources for many raw materials, US tech companies depend heavily on imported components and other materials from China. If the biggest tech companies can absorb the price hike over the short term, consumers are more likely to be interested in continuing to shop with them.
As the economic war between these governments escalates, the US population seems to be getting the worse end of the exchanges. The Chinese government has been historically tricky for western corporations to work with, and because of that, there aren’t many of them in operation within the country. The raising of tariffs is less likely to affect Chinese locals since they have a much more limited choice of goods.