US tariffs could hit America’s biggest smartwatch and fitness band businesses

Proposed US tariffs on $200 billion of Chinese goods could hit both Apple Watch and FitBit, according to Reuters.

The news organisation says that government rulings on tariffs name Apple watch, several Fitbit activity trackers and connected speakers from Sonos Inc, as some of the biggest hit.

That $200 billion list of tariffs is in a public comment period, but if the list goes into effect this fall, the products from Apple and Fitbit could face a 10% tariff.

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The New York Times has reported that in a meeting in May, President Trump told Tim Cook, CEO of Apple, that the US government would not levy tariffs on iPhones assembled in China.

Sage Chandler, vice president for international trade policy at the Consumer Technology Association, told Reuters: “The way the president has been using his trade authority, you have direct examples of him using his authority to target specific products and companies.”

Specific products listed in customs rulings are the original Apple Watch; Fitbit’s Charge, Charge HR and Surge models.

Bernstein analyst Toni Sacconaghi has estimated that the Apple Watch alone will bring in $9.9 billion in sales this year, though that estimate includes sales outside the United States that the tariff would not affect.

It is possible though that the products from Apple and Fitbit no longer fall under tariff codes in the $200 billion list, as trade experts have said the codes applied to specific products are only public knowledge because their makers asked regulators to rule on their proper classification.

However, if companies have products whose tariff codes are on the list, experts have said they have three options; advocate to get the code dropped from the list during the public comment period, apply for an exclusion once tariffs go into effect, or try to have their products classified under a different code not on the list.

One former US trade official told Reuters that the last option could prove difficult due to the thousands of codes covered.

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Alex Douglas

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