Paul Santos thought Trump’s tariffs would hit the iPhone first. He was wrong.
A couple of weeks ago, I wrote an article on Apple (AAPL) showing that if rumors were true, then Trump’s intention of slapping additional tariffs on Chinese products could potentially hit the iPhone. The reason for this was that the iPhone was arguably the largest culprit of the trade deficit within the very segment Trump was said to be targeting.
Two weeks went by and the rumors were half confirmed. Trump’s tariffs did come to fruition and sought to slap an additional 25% tariff on more than 1,300 Chinese goods, accounting for $50 billion in imports. However, Apple was spared. Apple was spared because this massive list ended up not focusing on the previously rumored segments.
Indeed, the US list ended up following some weird logic. The intent of the list followed, roughly, the following logic:
- To spare the American consumer.
- To hit Chinese products where alternate (foreign!) sources existed.
My take: Tim Cook’s shuttle diplomacy may be paying off. Meanwhile, props to Santos for owning his error.