Bokeh Media’s Kim Forrest and Wedbush Securities’ Dan Ives Discuss Trump’s Tech Tariff Exemption: Implications for Apple
On a recent episode of ‘The Exchange’, hosts Kim Forrest from Bokeh Media and Dan Ives from Wedbush Securities delved into the intricacies of the tech tariff exemption recently granted by President Trump and its potential impact on Apple.
Background: The Tech Tariff Exemption
In late July 2018, President Trump announced that he would be imposing a 10% tariff on an additional $200 billion worth of Chinese imports. However, he also granted exemptions to certain products, including some tech components, to avoid disrupting the US tech industry. Apple, which sources a significant amount of its components from China, was among the beneficiaries of this exemption.
Impact on Apple: A Double-Edged Sword
Kim Forrest began the discussion by acknowledging the relief Apple felt at being exempted from the tariffs. She went on to note, however, that the situation was not without its challenges:
- Higher Component Prices: While the tariffs would have directly increased the cost of Apple’s products, the exemption does not ensure that component prices will remain the same. In fact, some suppliers may choose to pass on their increased production costs to Apple, which could lead to higher prices for consumers.
- Supply Chain Disruptions: The tariffs could still cause disruptions to Apple’s supply chain, as some suppliers may shift production to countries other than China to avoid the tariffs. This could lead to longer lead times and potential quality issues.
- Trade Tensions: The ongoing trade tensions between the US and China could negatively impact Apple’s business in the region, as well as its reputation. Consumers in China may be less inclined to purchase Apple products due to the political climate.
Impact on Consumers and the World
Dan Ives weighed in on the potential impact of the tariff exemption on consumers and the world at large:
On Consumers: Ives noted that, while the tariffs could lead to higher prices for some tech products, the impact would likely be minimal. He pointed out that the average consumer spends only a small percentage of their income on tech products, and that the overall cost of living would not be significantly affected.
On the World: Ives also discussed the potential ripple effects of the tariffs on the global economy. He noted that, while the US tech industry would be relieved by the exemptions, other industries, such as agriculture and manufacturing, would not be so lucky. Additionally, the tariffs could lead to a trade war between the US and China, which could have negative consequences for both economies.
Conclusion: A Wait-and-See Approach
In conclusion, the tech tariff exemption granted to Apple and other tech companies is a complex issue with both positive and negative implications. While the exemption will help to avoid immediate price increases for consumers, it also brings the risk of supply chain disruptions and potential long-term consequences for the tech industry and the global economy. As such, a wait-and-see approach is warranted, with close attention paid to developments in the tech industry and the broader trade landscape.
Stay tuned to ‘The Exchange’ for further insights and analysis on this and other tech industry topics.
