Apple, Sonos, and Fitbit are all due to be hit with tariffs this fall

By Greg S ยท 9 replies
Jul 20, 2018
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  1. As the United States continues to battle China in a trade war, several consumer tech companies are on a list to be hit with 10 percent tariffs. Apple, Sonos, and Fitbit all have devices manufactured in China that are classified as data transmission machines which have been slated for additional tariffs effective in the fall.

    Products such as speakers with AI assistants, smart watches, and activity trackers may all be subject to import duties. Due to product classifications used for tariffs, smartphones and laptops are still exempt from additional taxes.

    So far, Apple's only product to be affected is the Apple Watch. Fitbit will be subject to new taxes on its Charge, Charge HR, and Surge fitness trackers. Sonos will face increases on the Play:3, Play:5, and Sub speaker.

    None of the companies have offered any comment on the matter at this time. Since Sonos is seeking to go public, a regulatory filing includes comments relating to tariffs. Sonos states that tariffs and other trade restrictions "could require us to raise the prices of our products and harm our sales."

    Out of the three companies in question, Apple holds the best position. Customers shopping for an Apple Watch are unlikely to be price-sensitive shoppers. Sheer volume of sales also leaves plenty of room for Apple to absorb any cost increases much more easily. Together, Sonos and Fitbit only generated $2.6 billion in revenue. Apple will bring in just under $10 billion this year from the Apple Watch alone.

    Even though a 10 percent increase in product cost could be extremely detrimental to Sonos and Fitbit, there is still plenty of time for changes to be made. Any business can request reclassification of their products by demonstrating a different category is a better description of a product. New product models with minor changes can also be launched to ensure a change of product classification by the US Customs and Border Patrol.

    Lastly, companies can also seek an exemption from tariffs during the public commentary period or ask for an exclusion once new tariffs are actually effective. In the current state of affairs, any option could be a difficult and costly endeavor.

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  2. Uncle Al

    Uncle Al TS Evangelist Posts: 4,109   +2,597

    It will be interesting to see when younger people start realizing the impact of the tariffs if their is an outcry and just how much good it will do ...... CBS reported the other evening that for things like houses it could add an additional $10,000 and for the Honda Civic it will be about $1,700.
     
    TempleOrion likes this.
  3. Kibaruk

    Kibaruk TechSpot Paladin Posts: 3,509   +1,055

    Why will companies struggle with the tariffs? It's simple economy, their products increase in cost so they will sell them at a higher price, people won't have the same purchasing power, it won't affect the company itself but the people, inflation will start sinking in.

    "Drive America to the ground again!"
     
    TempleOrion and Reehahs like this.
  4. Adorerai

    Adorerai TS Rookie Posts: 21   +7

    Will it affect the company if people stop buying a particular product because it's over priced? Or if it reaches a price that is no longer profitable? Or do you think people will continue buying the same product no matter how much the price increases? If that's the case, why not just double the prices?
     
    psycros likes this.
  5. Kibaruk

    Kibaruk TechSpot Paladin Posts: 3,509   +1,055

    True, so he is screwing everyone around.
     
  6. psycros

    psycros TS Evangelist Posts: 2,130   +1,643

    Hopefully the tariffs will eventually be so high that Apple is forced to build their overpriced gear in North America again. They could accept half the annual profits they get currently and still make absurd money. American companies should be employing AMERICANS or citizens of friendly nations to produce their products whenever possible. Why should US corporations be empowering hostile and/or parasitic regimes? Some profits come at too high a price. Don't worry, if the majority of the population stops buying Apple products because the prices are too high, those prices will come down. Remember when Trump said Apple should build their computers in the US? We may yet see that come to pass.
     
    Boilerhog146, Tonia73986 and Capaill like this.
  7. Evernessince

    Evernessince TS Evangelist Posts: 2,788   +1,919

    Given that the tariff is being applied across the board, it's not just Apple devices that are increasing in prices. In other words, these tariffs won't affect the competitive landscape. It's not even possible to apply a tariff to a single company either.

    The problem with building Apple products in the US is the lack of Apple factories to do so and the increased cost of shipping parts to the US (other than the obvious wage cost increase). You can keep increasing tariffs all you want but all that's doing is increasing the cost of goods in that entire category. By comparison, if all the products are expensive to begin with Apple suddenly doesn't look so bad anymore.

    Getting manufacturing back to America is no simple task. It requires factories, infrastructure, skilled workers, and supply chains. If the US wants to get back into the game it needs to start the process of rebuilding these first.
     
    TempleOrion and Tonia73986 like this.
  8. Kibaruk

    Kibaruk TechSpot Paladin Posts: 3,509   +1,055

    There is no freaking way that anyone is able to carry our current lifestyle as we know it without China, it's as simple as that.
    Remember when fridges, ovens and appliances where so so so expensive that people basically had a couple through their lifetimes and if they broke it was a pain and super expensive to fix? Yes, those were probably built in the United States (Please let's not perpetuate the American term, USA and America are not the same thing, Canadian are Americans, Mexicans are Americans, Brazilians are Americans, so on and on...).
     
    TempleOrion likes this.
  9. Gamblin Man

    Gamblin Man TS Member

    Keep voting Republican.
     
    Tonia73986 likes this.
  10. TempleOrion

    TempleOrion TS Member Posts: 22   +16

    What a surprise, Trumpsters are clueless about economics as well as everything else...
     

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