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Trump administration tariffs on Taiwanese chips could raise prices of Apple products

If you’re saving up for a new Mac, iPhone, or iPad this year, it might be a bit more expensive than you expected. The difference could come if the Trump administration’s plans to impose tariffs on Taiwanese chips from companies such as TSMC.

On Monday, Trump announced that tariffs of up to 100 percent could be imposed on chips, though he did not provide any specific details. The tariffs would affect nearly every tech company, including Apple, which relies on TSMC to produce the system on a chip at the heart of its products. TSMC is based in Taiwan, and the company gets 70 percent of its revenue from North American companies that import its chips.

When a government imposes an import tariff, the company, such as Apple, pays the government a fee for the ability to import that product into the U.S. As a result, Apple would almost certainly raise the price of the product, which would be covered by the consumer. As such, Apple may have to raise the prices of its products to cover the tariff imposed on the M- and A- series chips made in its products that are produced by TSMC. Apple’s other chips, such as its S-series (Apple Watch, HomePod) and H-series (AirPods), could also be affected.

For its parts, Apple has been making efforts to bring chip production into the U.S., which would help negate some of the tariffs. Two weeks ago, Nikkei Asia reported that TSMC’s plant in Arizona was in the final stage of verifying chips made at the plant. The first batch of chips made at this plant is expected to be “as early as this quarter” and Apple is expected to be TSMC’s largest customer of the Arizona plant. It’s presently unknown which chips will be made in the U.S. to start, and it’s thought they could be lower-volume older processors. Per CNBC, the plant will manufacture 4nm chips, which corresponds to older Apple chips and not the current enhanced 3nm M4, the standard 3nm M3, or the enhanced 3nm A18 used in current Macs and iPhones. TSMC is also said to be building another fab in Arizona that could create 2nm chips, but this site might not be ready until 2030.

The Consumer Technology Association issued a report in January that studied Trump’s tariff proposals. The report cited that there are two proposals: a 10 percent tariff on all imports from all countries and a 60 percent tariff on all imports from China; or a 20 percent tariff on all imports from all countries and a 100 percent tariff on all imports from China. The CTA calculated that the tariffs would result in consumer price increases of laptops and tablets by 46-68 percent, and smartphones by 26-37 percent.

Stay tuned for additional details as they become available.

Via Macworld, CNBC, Reuters, and Nikkei Asia

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