Trump Presses Apple to Shift Production to U.S.

Cisco Systems Inc. Hewlett Packard Enterprise Co. and other technology companies sent a letter to US Trade Representative Robert Lighthiser urging the administration to avoid imposing more tariffs

Trump signals escalation of trade war with China, says he has tariffs ready on another $267-billion of imports

Trump imposed customs duties of up to 25% on $34 billion worth of Chinese goods in July, and on another $16 billion in August, triggering swift tit-for-tat responses from Beijing. The US plan could take effect as soon as Friday, when a public comment period on the proposal ends. Trump said on Friday he is considering another $267 billion of tariffs on China, which analysts said will affect virtually every category of consumer goods, to retaliate against what he calls unfair trade practices.

"More broadly, tariffs will lead to higher US consumer prices, lower overall USA economic growth, and other unintended economic consequences". In a recent Securities and Exchange Commission filing, Apple warned that tariffs and "other protectionist measures" could hurt the company financially.

Forecasters had said China's sales to the United States, its largest national export market, might weaken after manufacturers rushed to fill orders ahead of Trump's first tariff hike July 6. Apple Chief Executive Officer Tim Cook earlier this year told Trump tariffs "were not the right approach". "We hope, instead, that you will reconsider these measures and work to find other, more effective solutions that leave the USA economy and USA consumer stronger and healthier than ever before". Apple cited the Apple Watch, AirPods, and the Apple Pencil as potentially impacted products, but devices like the iPhone would likely be affected as well given a China-centric supply chain. And China has vowed to hit $60bn in United States products in retaliation. "If that is the case, voices of opposition (against any further tariffs) will definitely strengthen".

At the same time, Apple is already using components sourced from US manufacturers in some of its products.

Kudlow, who heads the National Economic Council, told CNBC the administration was still talking with China about trade issues but so far China had not met U.S. requests. But 2018 imports from China through July were up almost 9% over the same period of 2017, according to US Census Bureau data.

"I don't think this magnitude of tariffs has been priced into the markets", Ms Lara Rhame, chief United States economist at FS Investments, told Bloomberg Television. Apple said the tariffs would raise the cost of its USA operations and put it at a disadvantage to foreign rivals. Imports from the United States reached US$13.3 billion, a two per cent increase from the previous year. Earlier this year, the company said that as part of tax reform it would spend $350 billion in the USA over the next five years.

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