People are not happy that Mr. Trump exempted the iPhone tax

Huawei's Pura 70 series is not sold in the US. Photo: Reuter s

On the evening of April 12 (Vietnam time), the US Customs and Border Protection (CBP) updated its guidance, stating that electronic goods, including computers and smartphones, will not be subject to reciprocal tariffs. Previously, products from China were subject to a general rate of up to 145%.

This is good news for Apple and Samsung, but it makes the mobile giants of the billion-people country "disappointed".

Most influential on Apple

Computers and electronics are the largest category of imports from China to the US, accounting for 30% of total imports, according to Apollo Global Management, meaning they are the most exposed to tariffs, particularly Apple’s iPhone.

According to multiple sources, Apple had to rush to ship “hundreds of tons” of iPhones to the US in the past 10 days to avoid reciprocal tariffs. CNBC predicts that the company’s phone prices could triple if it had to move production back home.

iPhones on display at an Apple Store in China. Photo: Reuters.

Canalys data shows that Apple currently holds about 60% of the US smartphone market. Samsung has 20% and Lenovo's Motorola brand has 10%. Other companies such as TCL, Google, and HMD share the remaining small portion.

In the event of a 145% tariff, Apple will have to find a way to absorb the cost. They can cover it themselves without incurring a loss. However, the company's profits will be severely affected. The solution proposed by experts is to increase prices to share the deficit.

In this case, the main tax bearers are users in the US, the country with the increased tax. However, the company probably won’t let its customers in this country suffer alone. In its most recent quarterly financial report, the US contributed about 40% of Apple’s revenue, followed by Europe, China, Asia-Pacific countries, and Japan.

According to Chinese news site Lei Technology , the best way to handle this is to slightly increase the price of the product by the same amount globally. This means that customers around the world will have to share the increased tax with Americans. In return, users will receive an upgrade in RAM or storage to make up for the difference.

However, this will affect the competitiveness of the iPhone in the high-end phone market. These fluctuations caused Apple's stock to fall sharply in recent days, before recovering thanks to the CBP announcement.

Opportunity passed

If the 145% tariff actually takes effect, Chinese mobile companies will be the ones to benefit. According to a report by Canalys , the group of brands including Xiaomi, Oppo, Vivo, Huawei hardly sell phones in the US. Therefore, the tariff imposed by President Donald Trump will not affect them.

Similarly, the tariffs China has imposed on US goods have not affected these companies. Xiaomi, Oppo, Huawei rely on domestic supply chains. Components that Chinese partners do not produce are also imported from neighboring regions.

Mr. Liu Ba, President of Oppo China market. Photo: Oppo.

For example, the Snapdragon chips popular in Chinese phones are from Qualcomm, an American company, but are manufactured by TSMC's factory in Taiwan. South Korea's SK Hynix supplies internal memory and RAM. Only a small number of chips and PCBs depend on American partners, but there are many alternatives.

In general, Chinese phone brands are not subject to tariffs on either side. As a result, Chinese smartphone prices, especially flagships, are less affected by the trade war. When Apple is in trouble, it is an opportunity for them to gain market share domestically and in countries outside the US.

Liu Ba, President of Oppo China, said that the flagship market is expanding and the company wants to capture this segment. “This industry favors prepared companies. Whether the opportunity comes from other people’s problems or from market fluctuations, the key is whether you are ready. If you don’t do your job well, even if the opportunity comes, you won’t be able to grasp it,” Liu Ba said about the opportunity when Apple is facing tariff obstacles.

The US exemption from reciprocal tariffs on electronics products means that the above advantage no longer exists. Chinese manufacturers will have to continue to compete “on a flat-rate” with Apple and Samsung.

Source: https://znews.vn/nguoi-khong-vui-khi-ong-trump-mien-thue-iphone-post1545414.html