Trump spares Apple Watch, AirPods from fresh US$200 billion tariffs as trade war escalates with China

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The California-based tech firm has lobbied for the US to keep its products and components off the list of US$200 billion in Chinese-made items facing new US tariffs

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The new Apple iPhone XR is displayed during an Apple product launch event at the Steve Jobs Theatre on September 12, 2018, in Cupertino, California. Apple’s products have been spared from the latest US tariffs on Chinese exports after the company lobbied the US government. Photo: AFP

Chad Bray

Published: 12:30pm, 18 Sep 2018Updated: 8:34am, 19 Sep 2018

Apple’s smartwatches and wireless earphones were among the items that were spared as the US unveiled its updated list of tariffs on US$200 billion of Chinese-made products as US President Donald Trump escalated a trade war with China on Tuesday.

The Cupertino, California-based tech giant lobbied the Trump administration to not include more than a dozen categories of products and components in its proposed list of tariffs. These included its Apple Watch, AirPods and components for its various devices.

With its latest list, Trump has now targeted more than half of the goods exported to the US annually from China, as he seeks to reduce a trade deficit between the two countries and counter what he claims are unfair trade practices by the Chinese government, including forced sharing of technology. China exported US$505 billion of products to the US last year.

“Tariffs increase the cost of our US operations, divert our resources, and disadvantage Apple compared to foreign competitors,” the company said in a letter to the Office of the United States Trade Representative this month. “More broadly, tariffs will lead to higher US consumer prices, lower overall US economic growth, and other unintended economic consequences. As a result, tariffs will ultimately reduce the economic benefit we generate for the United States.”

Apple outsources most of its manufacturing to Foxconn, which makes them at its plants in China. Photo: Reuters

Apple, which manufactures many of its products in China through Taiwan’s Foxconn Technologies, noted in its filing that it is the largest corporate taxpayer to the US government and pays billions of dollars a year in local taxes.