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Apple cautions US tariffs on China could hurt its competitiveness

Apple Inc. has sent a letter to U.S. Trade Representative Robert Lighthizer warning that the Trump administration’s tariffs on China could harm its ability to compete in the global market.

The letter, dated June 17 but made public today, points out that all the iPhone maker’s core products are manufactured in China. The same is true for key accessories such as the AirPods plus many of the parts used in device repairs.

Apple’s letter comes as U.S. officials prepare to kick off consultations with private companies about a new round of proposed tariffs. Last month, the Trump administration raised the levy on $200 billion of Chinese goods from 10% to 25% after trade negotiations stalled. The Office of the United States Trade Representative was also ordered to “begin the process of raising tariffs on essentially all remaining imports from China,” which are worth about $300 billion.

Apple warned that the tariffs could put it at a disadvantage against Chinese device makers and other foreign rivals without a significant presence in the U.S. These companies wouldn’t be affected by the new levy, which might enable them to provide more competitive pricing.

The iPhone maker also cautioned that the tariffs might weigh on its economic contribution. Apple, the largest corporate taxpayer to the U.S. Treasure, last January pledged to invest $350 billion into the economy over five years. This figure includes, among others, the company’s projected spending with domestic suppliers and new expansion initiatives such as the engineering hub it’s currently building in San Diego.

Apple concluded the letter with an appeal to Lighthizer not to proceed with the tariffs. The document’s publication this morning followed reports that the iPhone maker is considering to shift some manufacturing outside China. According to the leaks, Apple has asked suppliers to look into the possibility of moving up to a third of the production for some devices to other countries.

Hon Hai Precision Industry Co. Ltd., better known as Foxconn, appears to be at the center of the initiative. The company, which assembles most of Apple’s iPhones, said earlier this month that it has enough capacity outside China to produce all the devices the company sells in the U.S.

Photo: Pixabay

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