Apple Rushes Shipments From India To Dodge Tariffs (indiatimes.com) 63
Apple rushed five planeloads of iPhones from India to the U.S. in just three days to beat new tariffs imposed by the Trump administration, Times of India reported Monday, citing sources. The urgent shipments during the final week of March aimed to avoid the 10% reciprocal tariff that took effect on April 5.
The stockpiling will allow Apple to maintain current pricing temporarily. "The reserves that arrived at lower duty will temporarily insulate the company from the higher prices that it will need to pay for new shipments," the Indian daily cited a source as saying. The Trump administration also announced a 26% reciprocal tariff to be implemented on April 9, potentially accelerating Apple's manufacturing shift away from China. India offers a significant tariff advantage, with Indian exports facing a 26% tariff to the U.S. compared to 54% on Chinese goods.
Further reading: India's Economic Chess Against Twin US Economic Threats.
The stockpiling will allow Apple to maintain current pricing temporarily. "The reserves that arrived at lower duty will temporarily insulate the company from the higher prices that it will need to pay for new shipments," the Indian daily cited a source as saying. The Trump administration also announced a 26% reciprocal tariff to be implemented on April 9, potentially accelerating Apple's manufacturing shift away from China. India offers a significant tariff advantage, with Indian exports facing a 26% tariff to the U.S. compared to 54% on Chinese goods.
Further reading: India's Economic Chess Against Twin US Economic Threats.
But (Score:5, Funny)
Shouldn't that be India rushing the shipment so India doesn't have to pay the tariff?
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That would be the Indian arm of Apple rushing shipments to Apple Inc., US, so that Apple India doesn't have to pay steeper tariffs to US Govt. Tariffs are paid by the importing company to the nation where the goods are arriving and not the exporting nation to the importing nation.
Re:But (Score:5, Informative)
Tariffs are paid by the consumer. It's a sales tax.
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That would depend on the incidence of taxes/tariffs. How elastic it is.
Re: But (Score:2)
Re: But (Score:4, Informative)
Actually, yes. If there is no price elasticity on the demand side, the company just loses profit margin or goes bankrupt. Basically, if customers will pay at most X and otherwise do without, and you are already at X, raising prices will lose you money. The question is whether customers need your product or only want your product.
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There are often economic costs associated with no wanting to pay more than X though. Worse nutrition if food gets too expensive, slower technological development if R&D costs are too high and demand for cutting edge stuff goes down.
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The US is more than capable of feeding itself.....
We might just have to start eating fruits and veggies when they are "in season"...just like we used to do not that many years ago....
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We might just have to start eating fruits and veggies when they are "in season"...just like we used to do not that many years ago....
The North Koreans refer to this economic model as Juche [wikipedia.org]. If we follow their lead, perhaps we will enjoy the same standard of living they have!
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North Korea implemented their policies of Juche because their economy is so shit they don't produce enough to feed their own people, let alone trade with anyone. Much of what they have was given to them by the Chinese or Soviets, but the Soviet Union collapsed and China isn't interested in pissing
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Even that will be more expensive due to higher costs at the farm.
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We might just have to start eating fruits and veggies when they are "in season"...just like we used to do not that many years ago.
So anyone who lives north of Texas has to eat only canned goods from November - April? Good plan. In much of the country, right now, nothing is "in season."
Re: But (Score:2)
I mean, everyone could migrate season to season. Self-driving mobile homes for everyone!
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Yes, that can be the case in a price sensitive market. Remember, Apple has ~120% margin on an iPhone. It can definitely swallow 26% if it chooses too. But I doubt that, given the American consumer will pay anything to own an iPhone.
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Yes, because Apple is famous for reducing their margins to keep prices the same to the end user.
No wait, they're the original $1200 phone guys.
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Yes, because Apple is famous for reducing their margins to keep prices the same to the end user.
No wait, they're the original $1200 phone guys.
Samsung has high-priced phones as well - does that make them the "original $1500 phone guys"?
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Yes, because Apple is famous for reducing their margins to keep prices the same to the end user.
No wait, they're the original $1200 phone guys.
Samsung has high-priced phones as well - does that make them the "original $1500 phone guys"?
It's just like with PCs, you take an expensive Apple product, then compare it to the cheapest Windows powered product. As I wrote above, I bought a top end (at the time) iPhone, and my kid gots a Samsung. He paid a good deal more. But in the ford versus chevy world, you don't count the expensive Samsung, the comparison is a top end iPhone vs a Motorola Moto G Power 5G.
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Yes, because Apple is famous for reducing their margins to keep prices the same to the end user.
No wait, they're the original $1200 phone guys.
I have a iPhone 13 Pro Max. My son bought a new Samsung at the same time. It cost a good deal more.
Apple phones are outrageously expensive when compared to a Motorola Moto G Power 5G @ $179.48 from Amazon. But not all of us want a rock bottom phone.
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They probably will pay the extra, but they'll certainly not be happy about seeing the prices go up. And even if it did bring manufacturing "home" to the US, the prices would likely be even higher, so at the end of the day they're going to complain either way.
Now, to SOME degree in a military scenario where imports can be disrupted, I think its a good idea for the US to maintain good capability to manufacture guns, ammunition, vehicles, ships, etc domestically with as little foreign parts or resources as po
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To be fair, it wasn't just the US. All countries experienced shortages. Each country producing their own goods doesn't really make a lot of sense, as well as being horrible for the environment.
It needs a different solution. One that is resilient to extreme events. Perhaps robotics can play a role here, but it is still too early for that. The orange man isn't helping here at all so I doubt the solution will come from the US. Even if it is a good solution, global trust in the US is gone now.
BTW Don't ask
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To be fair, it wasn't just the US. All countries experienced shortages. Each country producing their own goods doesn't really make a lot of sense, as well as being horrible for the environment.
It needs a different solution. One that is resilient to extreme events.
All of the supply chain problems have been caused by companies trying to have zero inventory on components so that they can adapt quickly to changing sales. But what they forgot was that this makes them vulnerable to supply-chain disruptions, because their designs can't quickly adapt to changing supply of components. They ignored that critical part of the model, but we bailed them out. Make a pledge that next time, we won't bail them out, then make sure that there is a next time.
Step 1: Increase the rate
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Yes, that can be the case in a price sensitive market. Remember, Apple has ~120% margin on an iPhone. It can definitely swallow 26% if it chooses too. But I doubt that, given the American consumer will pay anything to own an iPhone.
Well shit - lets tariff Apple directly, prosperity will follow, and god's blessings will shower down upon us.
Funny how now the Republican mantra is that profits are obscene.
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Keep in mind, Trump's goal is to return manufacturing to the US. iPhone assembly labor is about 24 hours, and Foxconn assembly workers are paid $1.78/hour [cnet.com]. I doubt you could hire American workers to do this job for less than $20/hr, so in one fell swoop, the labor cost of making an iPhone jumps from $42.72 to $480. Maybe I'm wrong and you can hire good people for $15/hr, so maybe only $360. Of course there's the amortization of the factory facility itself. But wait; there's more.
Let's take chip fabrication,
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If the American consumers dump the iPhones like hot potatoes, because now an iPhone is 26% more expensive, then Apple Inc. will have to swallow the tariffs and will not be able to pass it along to the US consumers. And conversely, if the American consumers want to own an iPhone no matter what the price, then Apple will be more than happy to pass on the 26% tariff (plus more?) to the consumers. And then there is everything in between...
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I have a feeling that we're looking at one of the few cases where the supplier will swallow the costs instead of passing it on to the consumer. Basically the question is, if Apple felt that a phone they sell today for $999 could be sold for $1,249, then wouldn't they already be charging $1,249? Their prices have no relationship to the build costs and they're already making huge profits on each sale.
Most of the time this won't be the case, as most consumer spending is on commodity items with very little prof
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Do not underestimate the power of well socialized macroeconomic trends being used as excuses for price hikes.
Remember in 2021 when everyone jumped their prices and blamed "logistics snags"? Funny how the logistics snags were solved, but prices remained steady, yeah?
Everyone has heard of tariffs at this point, and it's more-or-less understood by anyone paying attention that we're going to eat the costs. So why wouldn't Apple let us eat those costs when we're all expecting it?
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Not really (Score:2)
There is only a handful of companies to purchase anything from. So in practice those companies can and will just passed the cost right onto the consumer because there is basically no competition left in our economy. The only thing that was keeping prices from going completely out of control was cheap imports and the threat of elections upending everything.
We
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So in practice those companies can and will just passed the cost right onto the consumer because there is basically no competition left in our economy.
There is one option the consumer has left -- he can keep using his old phone, or buy a used phone instead. I imagine that during a major recession, that is what many (most?) people will do, rather than paying outrageously high prices.
The downside of that, of course, is that if consumers stop buying product, them the companies selling that product lose income, and start laying people off, which causes more economic distress, so more consumers stop buying product, and that causes more layoffs, and down the s
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More or less. To be pedantic the tariffs are paid by the importer (who is typically in the country receiving the goods). They are then passed on to the consumer in the form of higher prices.
But yeah - the exporter certainly isn't paying it.
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The exporter, in order to keep sales up, might drop their prices some, to absorb said cost increase....so that it isn't as expensive in the receiving country.
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In some abstract hypothetical sense, sure.
In any version of easily observed reality, they aren't going to give a single shit. The price is what the price is, and that's what the importer is going to pay. And any tariffs that land on the importer is the importer's problem.
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Tariffs are paid by the importing company to the nation where the goods are arriving and not the exporting nation to the importing nation. Tariffs are paid by the consumer. It's a sales tax.
There is only one thing that tariffs do - make things cost more.
And if the countries we tariff decide to enact similar tariffs on our goods, it means lost jobs because US exports will slow.
I suppose those Kamala = High Prices Trump = Low prices signs that were all over the place were just suggestions?
Can any of our crypto conservatives tell us how conservatives once knowing this to fervently believing that Tariffs are the most perfect economic solution evah?
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The GP's strongly implied point was obviously that, despite what Trump claims, in the end the tariffs are an additional cost being paid by American citizens - the country of origin is not magically eating those additional fees.
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... so India doesn't have to pay the tariff?
In this case, Indian govt. is not incurring any immediate costs. There would be long term costs in terms of India *potentially* losing its cost advantage.
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I'm sure if India is well aware that, if it comes down to it, they can just line Trump's personal pocket and he'll cut them a deal [businessinsider.com].
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Indian govt. officials are too corrupt to do that. They are more interested in lining their own personal pockets than caring about their country.
So I don't think that'll work (Score:2)
The purpose of the tariffs is the create a national sales tax to replace the taxes paid by the 1%. As a percentage of their income they pay very very little but their income and their wealth is so staggering that it ends up being a huge sum. All told about half a trillion a year every year.
They want that money and they want to have a functioning government so their solution is going to be to shift their tax burden onto you.
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Yes, because importers are famous for absorbing tariff costs on the items they import, and never pass that along to the end purchaser, right?
Right?
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The stockpiling will allow Apple to maintain current pricing temporarily
Well the bigger question is, with the profit margin on the iPhone being as large as it is, why not just keep the price where it is? Will it hurt the fee fees of Wall Street?
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Yes, because for-profit corporations are famous for taking a margin hit on the chin without passing it on to the customer. That shit happens all the time, right?
Here's a question for you:
If literally every smartphone manufactured is manufactured overseas, and literally every smartphone gets a tariff applied when imported to the US, why would a smartphone manufacturer not add the tariff onto the price, just like literally every single one of their competitors is going to do?
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And what fantasy land are you basing any of that on? Because for-profit corporations are such charitable souls that they're just going to absorb double-digit percentage rises in their costs to save the "American consumer" ?
Please return to easily observed reality and stop posting your delulu fantasy bullshit.
For the uninitiated (Score:3)
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That's a pretty subtle reference, Andrew. Had to give it some thought to see it was applied correctly. And it was. :)
If there's one thing Tim Cook knows... (Score:3)
it's logistics.
Apple probably had this kind of pipeline acceleration in the works ever since the election.
Trump will make them retroactive... (Score:2)
unless Tim Apple makes a patriotic contribution
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The major tech CEOs all met with Trump a few weeks ago. Kissed his ring and swore their loyalty to him personally.
So a conspiracy to skirt the law (Score:2)
So a conspiracy to skirt the law between 2 international parties.
Got it.
Re: So a conspiracy to skirt the law (Score:2)
Hardly a conspiracy. It is public and legal and intended. Accelerated delivery happens to all pipelines when tariffs increase.
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If it's done perfectly legally and correctly, it's not skirting anything. And conspiracies are generally hidden, so I'd hesitate to call this one. This was just smart business.
Re:So a conspiracy to skirt the law (Score:4, Insightful)
How is it "skirting the law" when the law doesn't go into effect until ${DATE} and they're importing stuff previous to ${DATE}?
Please explain.
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Its not "skirting the law" if something is going into effect on X date so you scramble to do something before that date takes place. That's like saying people who drive 55 mph when the limit is 60 mph are "skirting the law" by just going a bit slower.
Doge Tariffs (Score:3)
In other news (Score:2)
iPhones are made in India now???
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Apple has been manufacturing part of the iPhones in India at least since 2017. It's not news.