Since his election last November, Donald Trump has multiplied radical economic decisions. Recall that before doing politics, the new American president was a businessman and a billionaire. He seems determined to apply his methods to the White House to straighten the country's finances. His latest target? Imports, especially those from China.
A measure that could cost Apple dearly,Or to our wallet?The Cupertino firm, which massively produces its iPhone in China, may indeed undergo the rise in customs prices recently announced by Trump. If you are an apple brand aficionado, expect a possible price increase in the coming months in the USA,But what about France?
© Apple
Customs duties that threaten Apple's margins
President Trump wants to promote American production by taxing imports more. Concretely,It plans to impose customs duties of 10 % on Chinese products,and up to25 %For Canada and Mexico. Bad news for Apple, a large part of the iPhone is assembled in China.
According to analysts from Bank of America,The Tim Cook firm could lose up to 9 % gross marginIf it absorbed this cost increase alone. To avoid this, it should increase its selling prices by around 10 % in the USA.
A more limited increase in France?
If Apple actually decides to increase its prices across the Atlantic to compensate for taxes, there is little chance that the firm applies a differentiated price policy in Europe. Tim Cook has always defended a coherent and harmonized pricing strategy on a global scale.
The impact could however be less brutal for French buyers. Unlike the United States where prices are displayed out-of-tax,those practiced in France already include the 20 % VAT.
This means that Apple could theoretically increase its prices by 10 % without adding as much costs to French consumers as to Americans. It is not total protection, but the inclusion of VAT limits part of the impact, making it less substantial!
A relocation under study to limit breakage
Faced with this threat, Tim Cook provides "monitoring the situation" closely. Questioned by investors at the end of January, he remained elusive about the solutions envisaged. According to analyst Wamsi Mohan, Apple studies in parallel in parallel the possibility of relocating part of its production in other Asian countries.
India and Vietnam would be in the viewfinder.Recall that these two countries are already assembling iPhone. Malaysia is also quoted, even if Apple is making it for the moment no iPhone, but its main subcontractor Foxconn is already established in the country.
These destinations are not currently affected by Trump's aggressive policy in terms of customs tariffs. Finally, by transferring certain factories to it, Apple would limit the impact of taxes on its margins, but this response may not please the president, who wishes above all to repatriate jobs in the United States.
If you wish to continue reading on a similar subject, do not hesitate to read our article on the firm position of the European Union in the face of Trump pressure concerning the regulation of GAFAM.Click here to find out more!
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