AirPods and Apple Watch Won’t Escape Next Round of Tariffs

Although it looks like Apple’s 2019 iPhones will be getting a slight reprieve from the latest round of tariffs in the U.S.-China trade war, not all of Apple’s products are going to be so fortunate to escape the increased scope of import taxes being levied on products coming into the U.S. from China.

Yesterday, the U.S. Trade Representative’s office announced that several categories of products would have their tariffs delayed until December 15th, however a careful reading of the list suggested that while the iPhone and MacBooks, and possibly the iPad, would be included, the same would probably not hold true for many of Apple’s other products. Specifically, the USTR noted that tariffs would be delayed for products in the following specific categories:

• Cell phones
• Laptop computers
• Video game consoles
• Certain toys
• Computer Monitors
• Certain items of footwear and clothing
  

Although the wording in the original announcement suggested that this isn’t a comprehensive list of categories, the USTR subsequently published the complete detailed list, which reveals that several of Apple’s popular products are still going to be hit with the new tariffs when September rolls around.

What’s Still Exempt (For Now)

While the full list is a 21-page PDF that spells out broad product categories rather than Apple products by name, Bloomberg has pored through the list and identified those categories that apply to Apple products, meaning the following will not be seeing any tariffs until December 15th:

• iPhones (“telephones for cellular networks”)
• iPads (“portable automated data processing machines”)
• iPod touch (“portable automated data processing machines”)
• MacBooks (“portable automated data processing machines”)
• Apple TV (“video streaming devices”)
• Apple Pro Display XDR (“external computer monitors”)
• All Apple Keyboards (“computer keyboards”)
• Beats wired Headphones (“wired headphones”)
  

It’s important to keep in mind, however, that this is likely a temporary reprieve at best, since the product categories in question have simply been delayed. In other words, many of Apple’s products will escape the new tariffs for the holiday shopping season, but unless the Trump administration changes its mind, they will be included automatically on December 15th.

That said, it still represents something of a coup for Apple, considering that the next four months are likely to herald a number of major releases, including three new iPhones, new iPad Pros and a 10.2-inch iPad, a new 16-inch MacBook Pro, and possibly even another MacBook Air refresh — all of which will be exempt from tariffs for their initial release.

What’s NOT Exempt

However, a whole bunch of Apple products will be getting hit with the new tariffs coming into effect on September 1st. While many of Apple’s accessories already got hit with Trump’s increased 25 percent tariff earlier this year, the new round of tariffs encompasses everything else that Apple makes in China, and those products that aren’t getting delayed tariffs include:

• AirPods
• All Beats Wireless Headphones
• Apple Watch
• HomePod
• iMac
• Mac Pro
  

As 9to5Mac points out, Apple could possibly make a case for the iMac to be included in the delayed tariffs, since it arguably fits into the category of “portable automatic data processing machines, not over 10 kg, consisting at least a central processing unit, keyboard, and display” although the category is clearly intended to refer to laptops, and it would be hard to argue that the iMac is particularly “portable.”

It’s also clear that the Trump administration feels that desktop computers should not be exempt, with President Donald Trump adamant that Apple should build a plant in Texas to manufacture the new Mac Pro.

What remains to be seen is whether this new 10 percent tariff is going to result in a price increase on Apple’s products, or whether Apple will simply absorb the costs itself. It’s extremely likely that we’re going to see a new fifth-generation Apple Watch arriving next month alongside the new iPhones, and there have been rumours about more new AirPods arriving as well. Both of these would provide Apple with an opportunity to increase the price of these products to account for the new tariffs, but whether it will do so is another question entirely.