Apple Watch and Fitbit could see price rise in US tariff standoff

Apple Watch
An Apple Watch

Smartwatches could be the latest victim of trade war sparring between the US and China with new tariffs hitting the Apple Watch and Fitbit activity trackers.

The $200bn list of tariffs could see the original Apple Watch face a 10pc tariff under an obscure tax code as part of a growing trade war.

While smartphones and laptops have so far been spared, smartwatch devices assembled in China, such as the original Apple Watch and Fitbit Charge, Charge HR and Surge models could all be hit by the increase.

The devices fall under "data transmission machines" in the list of US tax codes. Wireless speakers from Sonos would also be affected by the changes.

The tariffs are under consultation, but could go into effect in the Autumn. The tariffs would not affect product sales outside the US. The Apple Watch smartwatch currently costs $249 (or £249 for UK customers). This could see its US price increase to around $274.

While the move would probably only be a blip for Apple, with the Apple Watch only making up a small percentage of its revenue, it could prove more serious for Fitbit, which has suffered from slow sales causing its share price to fall more than 70pc since its 2015 listing. Fitbit shares fell 1.8pc yesterday.

Sonos, which is due to list later this year, said in a regulatory filing: “The imposition of tariffs and other trade barriers, as well as retaliatory trade measures, could require us to raise the prices of our products and harm our sales.”

It is possible that some of the products will no longer fall under the tax codes, as they may have been replaced by more recent models, trade experts told Reuters. Products such as the Fitbit Charge were released in 2014, so new versions may be exempt.

The tariffs come as part of US president Donald Trump's battle to cut the country's trade deficit with China. The US has already imposed $50bn worth of new duties on China on more than 1,000 products.

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