Apple in trade war ‘nightmare’ and iPhones in limbo



Jonathan Garber | Fox Business News

Apple’s’ special event at the Steve Jobs Theater on its Cupertino, California, campus on Tuesday, maybe overshadowed by the tense U.S. China trade war.

In the crosshairs; a new crop of iPhones and the pricing power that Apple normally wields.

Will it decide to raise prices due to the upcoming tariffs on Chinese-made goods, which includes its own products?

“While many U.S. companies are impacted by this latest trade tension, the ‘poster child’ for the US/China UFC trade battle continues to be Apple in the eyes of the Street with fears running rampant that these latest tariffs could significantly increase the cost of iPhones globally,” Wedbush Managing Director Dan Ives wrote last month.

Tuesday’s event will occur less than a month after Apple received a trade-war break when the U.S Trade Representative’s office said the tariffs that were set to hit $300 billion worth of Chinese goods, including Apple products, would be delayed from Sept. 1 to Dec. 15. but it is unclear what happens next when the key holiday shopping season will be in high-gear.

It’s also noteworthy that CEO Tim Cook has bent President Trump’s ear about the negative impact the tariffs will have on his company versus some of its rivals such as Samsung.

Analysts Shawn Harrison and Gausia Chowdhury at Cleveland-based Longbow Research calculate iPhone tariffs would require Apple to raise prices.

“We estimate that a 15 percent iPhone tariff would require a $68 ASP increase to offset the impact,” they wrote.


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