Jakarta, CNBC Indonesia – The United States (US) launched a smart watch (smartwatch) made by tech giant Apple and other consumer gadgets from the latest round of tariffs imposed on Chinese goods, according to a list of products released by the US Trade Representative (USTR) Monday (17/9/2018).
But parts for computer servers and networking equipment that power cloud data centers and internet-based services are now subject to duties, as are some parts for machines used to make semiconductors.
US President Donald Trump reignited his trade war with China Monday by imposing 10% import tariffs on US$200 billion of Chinese goods. He also warned that if China took retaliatory action against US farmers or industry, Trump would immediately launch a third round of tariffs on $267 billion worth of Chinese imports.
The government’s proposal drew protests from some tech companies earlier this year, but the USTR’s final list of taxable devices has excluded many big name and consumer brand products.
iPhones were not among the products Apple said would be included in the list of goods subject to another round of tariffs on $200 billion worth of imports in a Sept. 5 comment letter to trade officials. Apple had been concerned that its Apple Watch and wireless AirPods headphones would be subject to import tariffs, but neither was included in the list announced Monday.
The new 10% rate took effect on September 24 and will increase to 25% on January 1 2019, reported Reuters.
 Photo: Apple Watch Series 4 (REUTERS/Stephen Lam) |
However, if Trump adds import tariffs on $267 billion worth of goods, nearly every Chinese import would be affected, including iPhones, as well as all other smartphones. Apple shares fell 0.7% to US$216.29 after the close.
Shares of Chinese and Taiwanese Apple suppliers slipped Tuesday morning in Asia. Foxconn, the Taiwan-based manufacturer formally known as Hon Hai Precision Industry Co, fell 2%, while assembler Pegatron Corp dropped 2.4%. Shares of camera lens maker Largan Precision Co Ltd fell nearly 9%.
The new listing would also spare fitness tracking products from Fitbit Inc, which said in a comment letter to regulators that import tariffs would harm its own investments in the United States. Fitbit shares closed down 1% on Monday.
“We welcome this development and we appreciate the government’s time and effort to listen to industry and consumer concerns,” a Fitbit spokesperson told Reuters.
However, some products that help computer networks operate, such as routers, will remain on the new list, the official said. In all about 300 product categories were given suspensions, including some non-tech consumer devices such as bicycle helmets and infant car seats.
Apple did not respond to requests Reuters for comments.
Apple Chief Executive Tim Cook held dinner with US President Donald Trump last month, although he did not provide details of the discussion.
Apple said the US tariffs would affect prices for a “wide range” of Apple products, including smartwatchin a letter commenting on the government’s proposal earlier this month.
“Our concern with these tariffs is that the US will be hit hardest, and it will result in lower US growth and competitiveness as well as higher prices for US consumers,” Apple previously said in a letter commenting on the proposal.
 Photo: REUTERS/Elijah NouvelageApple CEO Tim Cook |
After Apple’s comments, Trump said in a tweet that there was an “easy solution” for Apple to avoid tariffs.
“Make your products in the United States, not in China. Start building new factories now,” he tweeted on September 8.
A variety of equipment used to make servers and networking equipment for data centers was included in the list announced Monday.
A group of technology companies including Cisco Systems Inc, Dell Technologies Inc, Hewlett-Packard Enterprise Co and Juniper Networks have requested that their products be exempted from import tariffs, but they are still on the list and have been granted only a few exemptions, such as for a group of networking-related accessories.
The group said in comments to trade regulators on Sept. 6 that “by raising the cost of networking products, the proposed import tariffs will hinder the development and adoption of cloud-based services and infrastructure.”
Apple also told regulators previously that some equipment in its data centers would likely be hit by tariffs.
The chip industry was also hit by new import duties.
Lam Research Corp., a company that makes equipment for producing chips, said in a Sept. 6 letter to trade regulators that import tariffs on raw silicon, ceramic machine parts and other items “add costs to our U.S. manufacturing operations and reduce our competitiveness in global semiconductor manufacturing market.”
However, all of the items in Lam’s letter were included in the final list.
Neither Lam nor the company’s technology group immediately responded to requests for comment.
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