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Apple Gets No Exemption from Chinese Tariffs

SubverseAug 1, 2019, 6:32:01 PM

By Mac Molli 

Last Friday, President Trump rejected Apple’s request to exempt manufactured parts of the Mac Pro from import tariffs after they announced their plan to move some production to China. The President made it very clear there would be no exceptions to his rule, claiming in a tweet that “Apple will not be given Tariff waiver, or relief, for Mac Pro parts that are made in China. Make them in the USA, no Tariffs!”

On July 18th Apple submitted an exclusion request to the Trump administration to exclude the parts used for their high-end Mac Pro desktop computer from import tariffs. This came a few weeks after they announced their plan to relocate production from Austin, Texas to Shanghai, China. According to filings posted by the Office of U.S. Trade Representative (USTR), Apple asked for 25% relief on key Mac Pro parts and accessories including: stainless steel and aluminum frame, power supplies, internal cables and circuit boards, and its optional wheels. In the past, some of Apple’s products have been excused from tariffs, including Apple Watch and AirPods.

The U.S.-China trade war has ensued in the past several months as the Trump administration placed billions of dollars in tariffs on Chinese goods while Beijing retaliated by imposing tariffs on American-made products. President Trump has threatened to impose an additional $300 billion in tariffs on Chinese imports which would affect a substantial amount of Apple’s products if implemented. When they requested 25% relief from the USTR, Apple argued the cost of Trump’s tariffs would harm their ability to compete with Chinese tech companies like Huawei and would decrease Apple’s ability to contribute to the U.S. economy. Economic advisor Larry Kudlow said to the White House press pool that Trump has encouraged Tim Cook to move operations out of China but that it's up to Cook, and if Apple moves some of its Chinese operations to the U.S. that would be “a very good thing.”

On Tuesday, Apple’ CEO Tim Cook, said his company wants to continue manufacturing Mac Pro computers in the U.S., also claiming he was talking with the Trump administration on the matter after President Trump refused to allow Apple to receive tariff exemption for their Chinese-made parts. Cook told analysts at CNBC, “In terms of the exclusion, we’ve been making the Mac Pro in the U.S. We want to continue doing that. We’re working and investing currently in capacity to do so because we want to continue to be here. And so that’s what’s on the exclusions... we’re explaining that and hope for a positive outcome.” The new Mac Pro is expected to be released this fall with a $6,000 price tag.