U.S. Denies Apple Tariff Relief on Mac Parts After It Commits to Assembling Its Computers in Texas

Economic Harm

Apple said it didn’t have any comment beyond last week’s announcement.

Exclusion decisions are based on whether a product is available only from China, is strategically important or related to Chinese industrial programs, and whether duties will “cause severe economic harm” to the company or U.S. interests.

In letters to Apple posted online, USTR said the five exclusion requests were denied because they “failed to show that the imposition of additional duties on the particular product would cause severe economic harm to you or other U.S. interests.”

In announcing that the Mac Pro would continue to be made in Texas, Apple applauded the Trump administration for its tariff relief on the other components, including the computer’s casing and accessories like the mouse and trackpad. The starting price for the Mac Pro is $5,999 and the optional wheels are expected to be an extra cost.

In its 15 requests for exclusions posted July 18, Apple said the devices or components are not related to Chinese industrial programs — and that “there are no other sources for this proprietary, Apple-designed component.”

No Relief

Trump had signaled that relief from tariffs would be rejected, saying in a July 26 tweet that “Apple will not be given Tariff waiver, or relief, for Mac Pro parts that are made in China. Make them in the USA, no Tariffs!” But the president later told reporters “we’ll work it out” and that “I think they’re going to announce they’re going to build a plant in Texas.”

Apple’s requests involved goods that are part of $200 billion in Chinese products hit with tariffs last September. Trump increased the duty on that batch to 25% from 10% in May. The rate is due to rise to 30% on Oct. 15, including on another $50 billion of goods also hit last year.

Products such as the Apple Watch, AirPods and iMac computers were hit by 15% tariffs earlier this month, while the iPhone, iPad and other major Apple products are set to be impacted later in December. Apple has maintained that its products are primarily designed in the U.S. and has grown its local investment since the trade war began brewing.

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https://fortune.com/2019/09/30/us-apple-tariff-relief-mac-pro-texas/

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