Published: Wed, November 28, 2018
Markets | By Jeffery Armstrong

Apple could 'ultimately mitigate' Trump's tariffs, UBS says (AAPL)

Apple could 'ultimately mitigate' Trump's tariffs, UBS says (AAPL)

Ahead of a meeting where the leaders of the world's two largest economies are widely expected to enter a trade deal, Trump told the Wall Street Journal he expects to raise tariffs on $200 billion in Chinese imports to 25 percent, calling it "highly unlikely" that he would accept China's request to hold off on the increase.

"If we don't make a deal, then I'm going to put the US$267 billion additional (tariffs) on", at a tariff rate of either 10% or 25%, Mr Trump told the media publication.

In New York, Apple Inc was down 0.5 per cent after Trump said tariffs could also be placed on laptops and iPhones imported from China.

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At the G20 meeting in Buenos Aires on November 30, Trump and Chinese President Xi Jinping are expected to discuss contentious trade matters that would have an impact on trade-sensitive currencies such as the Australian and New Zealand dollars. Trump's comments to the Wall Street Journal that he may include Apple's signature product in another round of tariffs on Chinese imports are another blow for Chief Executive Officer Tim Cook.

"Trump's pessimistic view on the chances of a game-changing China trade deal may puncture global equity markets' optimistic start to the week", said Sean Callow, a senior FX analyst at Westpac in Sydney.

Speaking to the Wall Street Journal, Trump said that the only deal he would take from China would be to open up to United States competition.

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"They have to open up China to the United States". Although iPhones are assembled in China, some of the parts come from the US.

In September, Washington slapped 10 percent duties on $200bn in imports from China in an effort to get Beijing to reverse alleged unfair trade practices, such as the forced transfer of intellectual property and massive state intervention in markets. The Journal said the administration has been anxious about a consumer reaction to such levies.

Apple's shares fell by 2.11% or US$3.69 to US$170.93 during after-hours trading at 8.25am UTC on Tuesday. An Apple spokesman did not immediately respond to Reuters' queries. His aides, however, have reportedly suggested that those items be exempt from the tariffs in fear of consumer reaction. -China trade relations, tariffs are not the best way to resolve them. Earlier this year, Apple said products like the Apple Watch and AirPods would be affected before the USA said it wouldn't impose taxes on such items.

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