iPhone's Price Could Touch the Sky Under Trump's Regime

BENGALURU: All the firms and policymakers are eagerly waiting to see the impact on the US economy under President-elect Donald Trump’s trade agenda. There are list of things that he has assured, which include applying tax on Chinese products approximately about 45 pct, enhancing US manufacturing and many more. With these new rules on, what impact would it be on trading goods? To understand the effect, let’s take a look at how they’d encroach on one of the most popular companies on Earth: Apple, according to Gadgets 360 degree.

Apple makes the profit through a global supply chain that depends on low trade barriers and factories that are located near to one another. When trump talks about disrupting trade he refers to imposing a tax on imports, which means increase in the cost for firms to bring goods to the US shores. Hence, with Apple, whose devices are first of all expensive, is supposed to get more expensive leaving customers to think twice before buying a new iPhone.

According to Roger Entner, a wireless analyst at Recon Analytics asserts that "If he institutes a 35-percent penal tariff on every export from China, then most of what you buy at Walmart is 35 percent more expensive."

However, Apple refused to comment on whether a tariff would lead to a hike or not. It further states that it is responsible for creating more than two million jobs across the United States; from engineers, retail and calls center employees to operations and delivery drivers. We work with over 8,000 suppliers from coast to coast and are investing heavily in American jobs and innovation.

If china strikes back against Trump’s decision by increasing its own trade barriers then Apple could get affected significantly. With this possibility, Trump may not risk due to the explicit limitations on his authority. Analysts predict that even lower tax, at 15 pct, could send the price of an iPhone soaring close to $700.

Trump had said out loud that he would want Apple to manufacture the iPhones in US, rather than any other country. But the fact is that Apple desires to do business outside the country to keep the global supply chain rolling. By trading with China, Apple creates economies of scale and cuts costs in a large margin. On top of that skilled labors are plentiful in China.

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