Tech giant Apple will not be hit by duties on goods imported from China, after products including headphones and smartwatches were excluded from US tariffs on imported items, The Wall Street Journal (WSJ) said.
The move is also likely to benefit Fitbit, which had previously warned it could suffer. Speaker manufacturer Sonos was also mooted previously as a possible casualty.
The US imposed duties on some $200 billion of goods as part of an ongoing trade dispute between the countries. The report suggested Apple (and, presumably by extension, Fitbit) could be impacted by any retaliatory measures taken by Beijing.
A White House statement said if China strikes back, another round of restrictions will be imposed in the form of tariffs on an additional $267 billion of imports.
Apple, in particular, is in a precarious position, because not only does it assemble products in China, but the market is also big business for the company. With Apple in the process of introducing new products, and the lucrative Christmas holiday sales period on the horizon, it is an important time for the iPhone maker.
Smartwatches and wireless headphones were set to be subject to a 10 per cent tariff from 24 September, before they were excluded from the list. IHS Markit figures cited by WSJ showed this would have added more than $11 to the import cost of products such as Apple Watch.
While Apple could have swallowed the cost and reduced its profit margin if it wanted, Fitbit’s financials are not as robust.
Moves by China could disrupt Apple’s supply chain, which is hugely reliant on the country for the production of devices, with no easy short-term workaround. While ZTE’s spat with the US was for a different reason, it does show the level of disruption a company can face from a disturbance in supply, even if this is a short-term issue.Subscribe to our daily newsletter Back