US regulators approve some Apple tariff exemptions
Visitors at an outlet of Apple in New York. Reuters
The move by US officials could make it easier for both Apple and small makers of gaming computers to assemble devices in the United States by lowering the costs of importing parts.
Apple did not say why it requested the exemptions, but the requests were for components such as partially completed circuit boards. Apple manufactures its Mac Pro computers in Texas, making the machine immune from tariffs, but such intermediate parts were subject to the levies. Apple did not immediately return a request for comment.
The Mac Pro computer starts at $6,000 and is intended for users such as music and motion picture studios. Due to its specialised design, the device has never sold in large numbers. But it became a political flashpoint earlier this year when The Wall Street Journal reported that Apple was moving production to China.
Apple never publicly commented on its exact production plans, but US tariffs on Chinese goods complicated the assembly of PCs in the United States. The third list of US tariffs that went into effect last year placed levies on both some fully assembled PCs as well as the major components to make them, meaning manufacturers faced cost increases even if they made machines in the United States.
The tariffs also hit the PC gaming industry, where enthusiasts often assemble their own custom machines from parts, many from China.
Apple applied for the exemptions for some components but President Donald Trump said US regulators would not grant them. Apple Chief Executive Tim Cook later said during the company’s July 30 earnings call that Apple wanted to keep making Mac Pros in the United States.
“We want to continue to be here,” he told analysts on the call, adding that Apple was investing in capacity to do so.
On Friday, trade officials lifted tariffs on a range of computer components for Apple and all other manufacturers, including partially assembled main circuit boards and graphics cards. Those are critical to computer assemblers because they contain chips from Intel Corporation, Nvidia Corporation and Advanced Micro Devices. Those chips are typically some of the most expensive parts in the machines.
Meanwhile, Apple’s latest iPhone 11 range hit stores in China on Friday, with short queues of die-hard fans contrasting with the hundreds who camped out ahead of some previous launches.
The sales performance of the US tech giant’s latest line-up is being closely watched in the world’s largest smartphone market, where Apple has been losing ground to competitors with cheaper and feature-packed handsets in recent years.
The queues at the Shanghai and Beijing stores, which combined added up to few dozen customers, were in sharp contrast to previous years, when hundreds used to wait for hours outside Apple’s shops to be the first to grab its latest offerings. But much of the fanfare in China has moved online where the pre-sales for iPhone 11, priced between $699 and $1,099, started last week.
Analysts said they had gotten off to a better start than the last cycle a year ago. Chinese e-commerce site JD.com said day one pre-sales for the iPhone 11 series were up 480% versus comparable sales for the iPhone XR last year.
Among customers that took to a store in Beijing on Friday to make a purchase in person was a programmer who only gave his surname as Liu, who said he had a model from every Apple series since the 3G range.
He said he was particularly attracted to the more expensive iPhone 11 Pro, which has three cameras on the back. “When it comes to taking photos, it’s better for night shots and the image is clearer,” he told Reuters.
Other customers, however, said that they were concerned that the range was not enabled for fifth-generation networks, putting them behind 5G models already released by China’s Huawei Technologies and smaller rival Vivo, and expressed hopes that Apple could make it happen for its next line-up.
“I think by the end of next year, especially in big cities like Beijing, 5G will be commonplace,” said civil servant Liu Liu. “If they don’t research this then they’ll lag way behind.”
The in-store launch of the iPhone 11 in China came a day after Chinese smartphone maker Huawei unveiled new smartphones which it said were more compact, with more sensitive cameras and wraparound screens more vivid than those of the latest iPhone, though it played down concerns about the lack of access to Google’s popular apps.
Huawei has experienced a surge in support from Chinese consumers after the brand was caught up in a trade war between the United States and China, which has in turn eaten into Apple’s market share in the country.
Reuters
