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Apple appears ready to absorb tariff costs for the short term

With the tariffs on assorted products from China having kicked in on September 1st, JPMorgan has estimate that Chinese tariffs could cost the average $1,000 a year.

The tariff applies to a huge range of products from milk to sports equipment, with many Apple products hit…

A spokesperson for the National Retail Federation stated that the tariffs will raise prices for American families and hurt the economy:

“We’re talking about the potential for millions of lost jobs, less investment, slower GDP growth, increased unemployment, higher prices. This is a perfect storm.”

Tariffs took effect yesterday on the following Apple products:

  • Desktop Macs
  • Apple Watch
  • AirPods and all wireless Beats headphones
  • HomePod

Apple has managed to escape a tariff on the iPhone for nw, so the first round of sales from the 2019 model iPhones will be tariff-free. A 15 percent tariff would apply to the following Apple products from December 15th on:

  • iPhone
  • iPad
  • MacBook/Air/Pro
  • iPod touch
  • Apple TV
  • Apple Pro Display XDR
  • Keyboards
  • Wired headphones

President Donald Trump initially said that Apple CEO Tim Cook had made a “compelling argument” that the tariffs would hurt Apple in its competition with Samsung, although reprieves from the tariffs were not made permanent.

Analysts such as the ever-reliable Ming-Chi Kuo expressed the idea that Apple will absorb the tariffs for now:

“Kuo writes that Apple has likely made ‘proper preparations’ for such a tariff, and he predicts that Apple will ‘absorb most of the additional costs’ in the mid-short term. Thus, Kuo believes that ‘prices of hardware products and shipment forecasts for the U.S. market will remain unchanged’ despite the tariff.”

That will, however, come at a cost to Apple’s bottom line. Back when the December tariff was set to be 10 percent rather than 15 percent, it was estimated that AAPL earnings would be cut by 4 percent. That impact will now be worse.

Stay tuned for additional details as they become available.

Via 9to5Mac and CBS