In July, Apple asked the Trump administration to exempt it from tariffs on Chinese-made Mac Pro components. In response, the President tweeted that no waivers would be forthcoming and that the company should relocate production to America. However, the Commander-in-Chief has changed his mind.
Last week, The Wall Street Journal reported that the Office of the U.S. Trade Representative has excused Apple from paying import taxes on 10 computer parts. The department also granted trade exemptions for 390 other items made in the Asian superpower.
Apple Exemption Details
In September 2018, Washington imposed levies on $200 million of goods manufactured in China. As a result, Apple had to pay a 10 percent import tax on key Mac components like its logic board, power supply, and Magic trackpad. Due to worsening relations between the U.S. and China, the Trump administration raised the tariff by another 15 percent this year.
Thanks to the new exemption, the corporation won’t need to pay import taxes on its parts until August 2020. Moreover, the federal government will refund the Big Tech corporation for levies it has paid since last year.
Apple also applied for exemptions on Mac circuit boards and power cables, but those requests are still pending consideration.
Notably, the Trade Representative didn’t exempt Apple from the Chinese-made electronics tariffs that will go into effect in December. Consequently, the company will still be liable for a 10 percent levy on all new iPhones and Apple Watches. Nonetheless, these new exemptions take a lot of pressure off the company’s bottom line.
Canceled Meetings, Stifled Hopes
While Washington’s decision to ease up individual import taxes is a positive sign, Beijing recently signaled that a trade war cease-fire isn’t imminent.
Bloomberg reported last Friday that a delegation of Chinese trade representatives canceled a series of planned meetings in the American Midwest. The group departed the U.S. ahead of schedule following President Trump’s announcement that he wouldn’t settle for “a partial deal.”
Notably, both Chinese and U.S. negotiators said that the trade talks that brought the Sino delegation to America went well. However, market analysts believe that President Trump’s hard-line announcement undid the progress achieved in those commerce meetings.
The U.S. Department of Agriculture viewed the Chinese delegation’s trip to the Heartland as a “goodwill gesture.” Indeed, agriculture leaders believe that the group’s visit would precipitate an increase in Sino sales. Chinese retaliatory tariffs on American farm goods have severely impacted sales of the agribusiness sector. Combined with erratic weather patterns, Market Watch notes that the U.S. farming industry is quickly approaching a crisis point.
If Washington and Beijing had decided to revoke their respective import taxes, U.S. farmers might’ve finally gotten some relief. But, following the Commander-in-Chief’s standoffish statement and the Chinese trade delegation’s early exit, the situation appears grim.
American and Chinese trade negotiators will meet again on October 10.