Apple asks US to waive tariffs on China-made Apple Watches, iPhones

Apple has asked the Donald Trump administration to waive tariffs on Chinese-made Apple Watches, iPhone components and other consumer products.
Apple store
The company on Thursday sought tariff exclusions from 11 products, including HomePod speakers, iMac computers, parts for use in repairing iPhones, iPhone smart battery cases, AirPods and others, according to company filings with the U.S. Trade Representative’s Office.

Cupertino, Calif-based Apple told the U.S. Trade Representative’s Office the products were consumer electronic devices and “not strategically important or related to ‘Made in China 2025’ or other Chinese industrial programs.”

The exclusions seek relief from 15 percent tariffs that took effect on Sept. 1. The public has until Nov. 14 to submit comments on the requests.

Apple generated revenue of $33.36 billion from iPhone, $6.99 billion from Mac, $4.65 billion from iPad and $6.52 billion from Wearables, Home and Accessories in the September quarter of 2019.

Apple is expecting revenue of $85.5-$89.5 billion, gross margin of 37.5-38.5 percent and

operating expenses of $9.6-$9.8 billion for its fiscal 2020 first quarter.

Apple submitted the requests on the first day the Trump administration began accepting them, Reuters reported.

Apple’s wearables and accessories business – which includes the Apple Watch, AirPods and HomePod – brought in $24.5 billion in its fiscal 2019 ended in September, or about 9.4 percent of Apple’s revenue.

Sales in the segment were up 41 percent versus the prior year, and the devices have become an important driver of Apple’s business as iPhone sales declined for the past four straight quarters.

Apple CEO Tim Cook said Wednesday on the company’s earnings call the company is paying “some tariffs today, as you know, some that went into effect pre-September and some others that went into effect in September. So we are paying some.”