Once the Trump Administration’s $200 billion tariff list, which currently is in the public comment period, comes into play, U.S. consumers are likely to see a price hike in consumer goods that are assembled in China.
According to U.S. government’s rulings on tariffs, the latest round of trade tariffs on $200 billion of Chinese imports to the U.S., are likely to make consumer goods, including Apple Watch, streaming music speakers, health trackers, and other accessories assembled in China more expensive.
The ruling names, Apple Inc’s several watches, Fitbit Inc’s activity trackers, and Sonos Inc’s connected speakers as several companies whose products are likely to be affected.
Earlier, consumer goods of U.S. companies which have which are widely sold in the U.S. have faced little danger of import duties. But now, according to the ruling, U.S. gadget makers will have to face higher import duties. It is likely that such goods may see a price hike.
These consumer devices, have been bracketed by U.S. Customs and Border Patrol officials under the subhead of data transmission machines in the U.S. tariff codes. This subhead includes more than 6,000 codes which could see higher import tariffs. Currently, the $200 billion list of tariffs is in a public comment period, once it goes into effect, items in this subheading are likely to face a 10% tariff hike.
As per a report from the New York Times which cites a source familiar with the matter at hand, Trump had told Apple’s CEO Tim Cook during a meeting in May, that he would not levy tariffs on iPhones assembled in China.
“The way the president has been using his trade authority, you have direct examples of him using his authority to target specific products and companies,” said Sage Chandler, vice president for international trade policy at the Consumer Technology Association.
Some of the product code that form part of the tariffs list have been replaced by newer models, which may have been reclassified. Thus, it is very much possible that products from Sonos, Apple and Fitbit may no longer fall within the ambit of the $200 billion list, said trade experts.
Experts opine, once a product whose code appears on the tariff list, a company has three options:
1) advocate to get the code dropped from the list during the public comment period
2) apply for an exclusion once the tariffs come into effect
3) Have the products reclassified under a code that does not appear on the list.
According to a former U.S. trade official, the last option could prove difficult due to the fact that thousands of codes are covered under the $200 billion tariffs list.