Apple faces new tariffs after Supreme Court ruling strikes down the old ones

Source: 9to5Mac

The US Supreme Court has declared on Friday that most of the import tariffs imposed by the Trump administration last year were illegal. Trump’s response to this now leaves Apple in a worse position than it was before.

While lobbying by Apple had resulted in almost all of its products being excluded from the previous tariffs, Trump has announced new ones which will include them again …

A quick recap

Last year saw a tariff story you really couldn’t have made up. It began on February 1 when Trump imposed blanket 10 % tariffs on all goods imported from China, additional to the product‑specific ones already in place. This included the bulk of Apple’s products, leaving either the company or its customers facing billions of dollars a year in extra costs.

Over the next two months, a rapid escalation of tit‑for‑tat tariffs between the US and China culminated in a peak rate of 145 %. After lobbying by Apple CEO Tim Cook, Trump then exempted a number of product categories covering all of the company’s products. Negotiations between the US and China subsequently saw the additional tariff rate reduced to 10 %.

While that appeared to be the end of the story from an Apple perspective, this has now changed.

Supreme Court strikes down tariffs

Trump had claimed that the International Emergency Economic Powers Act gave him the authority to impose tariffs without congressional approval. A number of large businesses challenged this and took the matter to court.

On Friday, the U.S. Supreme Court ruled that this law does not give Trump the power to levy new taxes and that the tariffs were therefore illegal.

Apple affected by replacement tariffs

The White House hasn’t given up. One day after the ruling, Trump cited an alternative law claiming that it gives him the power to impose tariffs. He announced a blanket 10 % tariff on all imports from all countries, and later the same day said that he would be increasing these to 15 %.

Since the latest proclamation applies to almost all product categories, it will once again apply to Apple products.

9to5Mac’s Take

The issue is unlikely to be permanent. Apple will likely lobby again for its product categories to be excluded, and businesses are again likely to challenge the legal basis for Trump’s claimed new powers.

Nevertheless, it creates unwelcome uncertainty for US companies like Apple that have their products manufactured overseas. They won’t know their true manufacturing costs until the issue is resolved at some unknown future date.

Photo: Joe Ravi / CC‑BY‑SA 3.0