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US tariff plans on Chinese goods may affect Apple watch sales

A number of health and activity tracking products might be hit by the United States’ new round of tariffs that it intends to apply to products related to China. These products include Fitbit, Sonos speakers, and even Apple watch as reported by Reuters.

Why these products are included in the list?

These are included in this list because these goods are assembled in China. After that, they are imported to the US. The devices have all been determined by U.S. Customs and Border Patrol officials to fall under an obscure subheading of data transmission machines in the sprawling list of U.S. tariff codes. And that particular subheading is included in the more than 6,000 such codes in President Donald Trump’s most recent round of proposed tariffs released earlier this month.

he New York Times has reported that Trump told Apple CEO Tim Cook during a meeting in May that the US government would not levy tariffs on iPhones assembled in China, citing a person familiar with the meeting.

Companies’ Reaction

Neither of these affected companies have commented on the same till now. Sonos though, has hinted about possibility of increased price of the product in future. There is a way these companies can get around this issue. Right now their product is classified data transmission machines in the sprawling list of U.S. tariff codes. But the latest update of their products might not be included in that list.

All three companies declined to comment on the proposed tariff list. But earlier this month to become a publicly traded company, Sonos said that “the imposition of tariffs and other trade barriers, as well as retaliatory trade measures, could require us to raise the prices of our products and harm our sales.”

Possible Way out

It can be possible that these products get removed from the $200 billion tariff list. It can happen as the companies are asking the regulators to properly classify their products. There are chances that these products are exempted from the list. Also, the products’ latest update might have changed the subheading under which they are classified.

But if companies have products whose tariff codes are on the list, they have three options, experts said. First: Advocate to get the code dropped from the list during the public comment period. Second: apply for an exclusion once tariffs go into effect. Third: try to have their products classified under a different code not on the list.

These tariff are also being applied to aluminium and steel which might affect MacBook Pro even though its production is taking place in the US itself.

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