15% Tariff Hitting AirPods, Apple Watch, HomePod and More in the U.S. This Sunday

Starting this Sunday, Apple's AirPods, Apple Watch, headphones, some iMacs, HomePod, and other products will be impacted by a 15 percent tariff as part of the United States' ongoing trade dispute with China, reports Bloomberg.

The tariffs were entered into the Federal Register today and will go into effect on 12:01 a.m. local time on Sunday in Washington, D.C. for products entering the U.S. or being pulled from warehouses for use in the United States.


Apple devices set to be impacted include the Apple Watch and Apple Watch bands, AirPods, HomePod, some Beats headphones, and some iMacs. Bloomberg says that repair parts for iPhones could also be affected, as could the NAND flash storage used in iPhones.

Apple analyst Ming-Chi Kuo said earlier in August that he believes Apple will absorb most of the U.S. tariff costs on its devices "in the mid-short term" rather than raising prices for consumers. Apple has been expanding its production facilities in countries like India and Vietnam, which, in the long term, will diversify manufacturing beyond China and alleviate tariff concerns.

Apple CEO Tim Cook recently met with U.S. president Donald Trump at Trump's Bedminster golf club, where Cook reportedly made a "good case" that tariffs would put Apple at a disadvantage with rivals like Samsung. "I thought he made a very compelling argument, so I'm thinking about it," Trump told reporters.

Apple in June also sent a letter to the Trump Administration urging against the tariffs because it would reduce Apple's contributions to the United States economy and weigh on its global competitiveness. Trump could still elect to delay the tariffs or exempt Apple products ahead of when they are set to go into effect, but recent tweets suggest that may be unlikely to happen.

Apple accessories like power adapters, cables, and cases are already subjected to an import tax at the current time, separate from the tariff set to hit new Apple products on Sunday.

This tariff won't immediately affect the iPhone, one of Apple's most popular devices that's responsible for a large portion of its revenue, until December 15 as tariffs on electronics like smartphones and laptop computers have been delayed so as to not impact the holiday shopping season.

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Trump Says Tim Cook Made ‘Good Case’ That Tariffs Would Put Apple at Disadvantage With Rivals Like Samsung

Apple CEO Tim Cook and U.S. President Donald Trump met for dinner on Friday evening, and Trump has since told reporters that the two discussed the impact of U.S. tariffs on Apple products imported from China.

Melania Trump, Donald Trump, and Tim Cook in August 2018

Trump said Cook "made a good case" that tariffs could put Apple at a disadvantage given that rival Samsung's products would be less impacted by the tariffs, according to Reuters. "I thought he made a very compelling argument, so I'm thinking about it," Trump said, speaking at an airport in Morristown, New Jersey.

The U.S. plans to impose an additional 10 percent tariff on approximately $300 billion of Chinese imports on September 1, but last week it delayed the tariff to December 15 for products including the iPhone, iPad, and MacBooks. Other products like the Apple Watch, AirPods, and HomePod are still set to be impacted September 1.

In a letter to the Trump administration in June, Apple urged against the tariffs, claiming that they would reduce the company's contribution to the U.S. economy and weigh on its global competitiveness.

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Apple Says Trump’s Tariffs Will Reduce Its Economic Contributions and Global Competitiveness

Apple has urged the Trump administration not to proceed with tariffs of up to 25 percent on a fourth set of goods imported from China, which would impact nearly all of its products, including the iPhone, iPad, Mac, Apple Watch, Apple TV, AirPods, Beats, HomePod, batteries, repair parts, and more.


In a letter sent to United States Trade Representative Robert Lighthizer [PDF] this week, Apple warned that the tariffs would reduce the company's contributions to the U.S. economy and weigh on its global competitiveness:
U.S. tariffs on Apple's products would result in a reduction of Apple's U.S. economic contribution.

U.S. tariffs would also weigh on Apple's global competitiveness. The Chinese producers we compete with in global markets do not have a significant presence in the U.S. market, and so would not be impacted by U.S. tariffs. Neither would our other major non-U.S. competitors. A U.S. tariff would, therefore, tilt the playing field in favor of our global competitors.

We urge you not to proceed with these tariffs. Thank you for your consideration of our comments.
Apple outlined many of its economic contributions in the letter, referring to itself as a "proud U.S. company" that is both the largest corporate taxpayer and one of the largest job creators in the country:
Apple is a proud U.S. company and one of the largest job creators in the United States. We are responsible for over 2 million jobs across all 50 states, including Apple's direct employees, employees at our manufacturing and retail partners, and Americans who make their living in the vibrant and growing app economy.

In 2018, after the passage of tax reform in the U.S., we announced our intention to make a total direct contribution to the U.S. economy of over $350 billion over 5 years and we are pleased to report that we are on track to achieve this contribution. We are opening several new sites and adding new jobs to our U.S. employee base.

Apple is also the largest U.S. corporate taxpayer to the U.S. Treasury and pays billions more each year in local property, sales, and employee taxes.

Finally, Apple's products are used by American families, students, businesses, government agencies, schools, and hospitals to communicate, teach, improve health outcomes, and enhance creativity and enterprise.
Last month, analysts at investment bank J.P. Morgan estimated that the tariffs could result in a 14 percent increase in the retail price of an iPhone XS, pushing the cost of the device from $999 to $1,142. However, the company could also choose to absorb the impact of the tariffs on a temporary basis.

The letter was earlier reported by CNBC.

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Tim Cook Changes Twitter Name to ‘Tim Apple’ After President Trump’s Name Flub

In a meeting of the Workforce Policy Advisory Board yesterday, U.S. President Donald Trump mistakenly referred to Apple CEO Tim Cook as "Tim Apple" in a flub that quickly spread around the internet.

Cook today joined in on the fun and changed his name on Twitter from Tim Cook to "Tim ," referencing Trump's mistake.


During yesterday's meeting, Cook was sitting right next to Trump when Trump referred to him as Tim Apple and he managed to keep a straight face at the time.
"We're going to be opening up the labor forces because we have to. We have so many companies coming in. People like Tim - you're expanding all over and doing things that I really wanted you to do from the beginning. You used to say, 'Tim, you gotta start doing it here,' and you have really put a big investment in our country. We appreciate it very much, Tim Apple."
Trump's mistake went viral on Twitter, spurring endless jokes and comments, especially because it's not the first time he's done it. Last year, he introduced Lockheed Martin CEO Marillyn Hewson as "Marillyn Lockheed."


Cook was at the meeting because he's a member of the Workforce Policy Advisory Board. The board was put together to make recommendations on policies to "to develop and implement a strategy to revamp the American workforce to better meet the challenges of the 21st century."

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Tim Cook Named to President Trump’s American Workforce Policy Advisory Board

The U.S. Department of Commerce today announced the 25 members of the Trump administration's new American Workforce Policy Advisory Board, including Apple CEO Tim Cook and IBM CEO Ginni Rometty.


The advisory board's recommendations will help guide the National Council for the American Worker's efforts to establish a strategy to ensure that American students and workers have access to "affordable, relevant, and innovative education and job training that will equip them to compete and win in the global economy."

The board is co-chaired by U.S. Secretary of Commerce Wilbur Ross and Advisor to the President Ivanka Trump and includes the following members:
  • Jay Box, President, Kentucky Community and Technical College System
  • Walter Bumphus, President & CEO, American Association of Community Colleges
  • Jim Clark, President & CEO, Boys & Girls Clubs of America
  • Tim Cook, CEO, Apple
  • Tom Donohue, CEO, U.S. Chamber of Commerce
  • Juanita Duggan, President & CEO, National Federation for Independent Business
  • Elizabeth Goettl, President & CEO, Cristo Rey Network
  • Marillyn Hewson, Chairman, President, & CEO, Lockheed Martin
  • Eric Holcomb, Governor, Indiana
  • Barbara Humpton, CEO, Siemens USA
  • Al Kelly, CEO, Visa
  • Vi Lyles, Mayor, Charlotte, North Carolina
  • Bill McDermott, CEO, SAP America
  • Sean McGarvey, President, North America’s Building and Trades Unions
  • Doug McMillon, President & CEO, Walmart
  • Craig Menear, Chairman, President, & CEO, Home Depot
  • Michael Piwowar, Executive Director, Milken Institute
  • Scott Pulsipher, President, Western Governors University
  • Kim Reynolds, Governor, Iowa
  • Ginni Rometty, Chairman, President, & CEO, IBM
  • Scott Sanders, Executive Director, National Association of State Workforce Agencies
  • Johnny C. Taylor, Jr., President & CEO, Society for Human Resource Management
  • Jay Timmons, President & CEO, National Association of Manufacturers
  • Sheree Utash, President, WSU Tech
  • Marianne Wanamaker, Professor, University of Tennessee
President Trump established the National Council for the American Worker in July 2018 to "create and promote workforce development strategies that provide evidence-based, affordable education and skills-based training for youth and adults to prepare them for the jobs of today and of the future."

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Apple CEO Tim Cook Joins Coalition Renewing Push for Immigration Reform

Apple CEO Tim Cook, Amazon CEO Jeff Bezos, Google CEO Sundar Pichai, Twitter CEO Jack Dorsey, Facebook CEO Mark Zuckerberg, and others have signed a new letter urging Congress to pass bipartisan legislation that would enable more than 700,000 immigrants to legally work and live in the United States (via CNBC).


The coalition's letter to help "Dreamers" will be featured in a full-page ad in The New York Times today. The term Dreamers refers to individuals who were brought to the United States at a young age when their parents or guardians illegally immigrated into the country. Under the Deferred Action for Childhood Arrivals (DACA) program, these people are protected and can gain legal work status in the United States.
"With the re-opening of the federal government and the presumptive restart of immigration and border security negotiations, now is the time for Congress to pass a law to provide Dreamers the certainty they need. These are our friends, neighbors, and coworkers, and they should not have to wait for court cases to be decided to determine their fate when Congress can act now," they wrote in the letter.

"We have seen time and again that the overwhelming majority of Americans of all political backgrounds agree that we should protect Dreamers from deportation," the letter said. "American employers and hundreds of thousands of Dreamers are counting on you to pass bipartisan, permanent legislative protection for Dreamers without further delay."
Apple and Tim Cook have been supporting DACA for years, and Cook began writing letters in support of the Dreamers in 2017, after President Donald Trump announced his original plan to phase out DACA over the course of six months. At the time, Cook said that 250 Apple employees are Dreamers: "I stand with them. They deserve our respect as equals and a solution rooted in American values."


In early 2018, Cook joined more than 100 CEOs in a letter urging Congress to protect DACA. The cause has been renewed this week as the United States government heads into another potential shutdown this Friday.

Apple has spent increasing amounts of money lobbying the Trump Administration, in 2018 alone spending $6.6 million and in 2017 spending $7.1 million. Apple's lobbying increased significantly after Trump took office, with the company spending more than ever before to influence the current government on issues such as privacy, education, climate change, trade, immigration, tax reform, and patent reform.

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Apple Continued to Spend Near-Record Amounts of Money Lobbying the Trump Administration in 2018

Apple spent $6.6 million on lobbying the U.S. government in 2018, after spending a record $7.1 million in 2017, according to disclosure forms (Q1, Q2, Q3, Q4) filed with the Office of the Clerk of the U.S. House of Representatives.


Apple's lobbying expenses have increased significantly since the Trump administration assumed office two years ago, with the iPhone maker spending more than ever before to influence the current government on issues such as privacy, education, climate change, trade, immigration, tax reform, and patent reform.

The largest amount Apple ever spent on lobbying Obama's administration in a single year was $4.6 million in 2016, his last year in office.

Apple also lobbied the government on the development of autonomous vehicle technologies, regulation of mobile medical applications, and distribution of video programming, hinting at some of the company's upcoming products and services, such as its widely expected streaming TV service later this year.

Apple CEO Tim Cook has maintained a civil relationship with Trump, but he has disagreed with some of the President's policies and actions as it relates to immigration, trade agreements with China, and beyond.

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Tim Cook Told Donald Trump China Tariffs Are ‘Not the Right Approach’ in Recent Meeting

Apple CEO Tim Cook conducted a private meeting with United States President Donald Trump on Wednesday, April 25, where the discussion was said to be focused "on trade." Following a recent interview with Bloomberg Television, Cook divulged more details about the meeting, mentioning that the two men discussed topics like recently imposed tariffs on China and the Deferred Action for Childhood Arrivals program.

In late March, Trump launched 25 percent tariffs on around $50 billion worth of Chinese products, citing a "tremendous intellectual property theft problem" in previous U.S./China trade relations. In the new interview, which happened on "The David Rubenstein Show: Peer-to-Peer Conversations," Cook admitted previous trade policies had their drawbacks, but still held that Trump's tariffs are "not the right approach" in this situation.

Apple CEO Tim Cook at the Executive Tech Summit at Trump Tower in December 2016
“It’s true, undoubtedly true, that not everyone has been advantaged from that -- in either country -- and we’ve got to work on that,” Cook said. “But I felt that tariffs were not the right approach there, and I showed him some more analytical kinds of things to demonstrate why.”
The two also discussed the Deferred Action for Childhood Arrivals program, which protects young immigrants who were brought into the U.S. as children from deportation. The Trump administration's decision to end DACA was blocked in January by a federal judge in San Francisco, and today representatives of the administration will attempt to convince the 9th U.S. Circuit Court of Appeals that it was justified in the move to end the program.

In the days after Trump signed an executive order against DACA early last year, Apple and other major tech companies penned an open letter to Trump urging the importance of the program. Cook discussed his support of DACA throughout the year, and told Rubenstein in this week's interview, "We're only one ruling away from a catastrophic case there."

Other parts of the interview touch upon the new corporate tax policy in the U.S., Apple's growing services segment, Apple Music's new 50 million paid and free trial user milestone, and the company's behind-the-scenes work on original TV content. Head over to Bloomberg to read more details from the interview.

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Trump’s Planned Tariffs on Imported Steel and Aluminum Would Likely Apply to Apple Products

U.S. President Donald Trump on Thursday said he plans to impose tariffs of 25 percent on imported steel and 10 percent on imported aluminum to protect domestic producers. Trump is expected to sign the formal order next week, and he promised that it will remain in effect for a "long period of time."


The controversial plan would almost certainly apply to Apple products like iPhones, iPads, and Macs, which contain a significant amount of the metals. The latest 15-inch MacBook Pro contains 740 grams of aluminum, for example, while the iPhone X contains 58 grams of stainless steel for its frame.

The details of Trump's plan aren't fully clear yet, however, according to Bloomberg News. If the tariffs only apply to raw materials, for instance, then Apple would be largely unaffected since the majority of its devices are assembled in Asia and shipped to the United States as finished products.

If the duties do apply to finished products, analyst Gene Munster speculated Apple's costs to make Macs and iPhones could rise as much as 0.2 percent, assuming the tax is a percentage of the steel and aluminum used in the devices.

Apple's domestic manufacturing is limited to the Mac Pro, assembled in Austin, Texas. The high-end computer contains 3,660 grams of aluminum and steel imported from outside of the United States, making it subject to the proposed tariffs. However, the Mac Pro is only produced in limited quantities.

The biggest question is whether the impact on Apple's profit margins would lead the company to raise the prices of Macs and iPhones, but given the company's costs are only estimated see a marginal increase, it would seem unlikely.

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Apple Spent $7 Million in 2017 Lobbying the U.S. Government Over Encryption, Immigration, and More

A new report out today by Recode examined how major technology companies spent a record amount of money lobbying the United States government in 2017, over issues like net neutrality, encryption, immigration, and more. In total, Apple, Amazon, Facebook, and Google spent about $50 million lobbying the government last year, and of that Apple alone spent $7 million.

Apple CEO Tim Cook attending an executive tech summit at Trump Tower in 2016

Apple's spending on lobbying grew from just over $4 million in 2014 to about $4.5 million in 2015 and 2016, before greatly increasing to $7 million in 2017. In terms of lobbying, this was a record spending amount for the company, and Apple's areas of focus were said to have been encryption and immigration. The last time Apple's lobbying amount emerged was in July 2017, when it was reported that Apple spent $2.2 million lobbying the government between April 1 and June 30, 2017.
Apple, Amazon, Facebook and Google cumulatively racked up a roughly $50 million tab fighting off President Donald Trump and an onslaught of new federal regulations last year — a reflection that the tech industry is increasingly under political siege in the nation’s capital.

And Apple shelled out $7 million — again, more than ever — to lobby the U.S. government over the same period. The iPhone giant continued to press forward on issues like encryption and immigration. And the company — like the rest of the industry — advocated for the tax reform law recently signed by Trump.
For the other companies, Google spent the most at more than $18 million in lobbying last year, Amazon spent more than $12.8 million, and Facebook spent $11.5 million. Google spent to "stave off new regulations targeting the content and ads" on its search engine and YouTube, while Amazon advocated for "friendlier federal rules" on online sales tax, cloud computing, and package delivery drones. Much of Facebook's 2017 lobbying was focused on its fight against "fake news" in newsfeeds.

Apple has found itself speaking out against the Trump administration for many topics over the past year. In 2017, it began with President Trump's executive order on immigration, then included protections for transgender students, environmental topics like climate change and the Paris climate deal, an overhaul to H-1B work visas, and the protection of the Deferred Action for Childhood Arrivals (DACA) program. The fight for DACA has continued into 2018, as well as Apple's support for a program that protects the spouses of those with H-1B visas.

Because of the ongoing lobbying, Recode reported that the technology industry's 2017 political activities "may only presage a tougher and costlier clash with Washington, D.C., in the year to come."

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