Apple warns investors about the possible influence of US rates on Chinese goods

In the companies quarterly application to the Securities and Exchange Commission (SEC), Apple warned investors about the impact that US rates on Chinese goods could have on a company. International trade disputes may result in tariffs and other protectionist measures that may adversely affect the business activities of the company. Rates can increase the cost of the company’s products and the components and raw materials needed to make them. These higher costs can have a negative impact on the gross margin that the company earns on the sale of its products.

As Bloomberg points out, the annual report contains wordings that indicate that tariffs and other protectionist measures could have a negative effect on Apple’s business, resulting in a lower gross margin or products that are more expensive for consumers.
Effect rate increase on customers and consumers
According to Apple, American rates on Chinese goods will affect companies, Apple warns investors. The higher rates could also make the products of a company more expensive for their customers. This could mean that products could become less competitive and reduce consumer demand.
Countries can also take other protectionist measures that could limit a company’s ability to offer its products and services. Political uncertainty about international trade conflicts and protectionist measures can also have a negative impact on consumers’ trust and expenditure, and that may result in a negative impact on a company’s business.
By default, Apple has to report every three months in an annual report (10-Q documents) how the company can be influenced by political events. The special feature of this report is that Apple never mentions anything specifically related to trade disputes.
Apple Warch
In addition to devices that include the Fitbit Charge and some Sonos speakers, but the latest proposal also includes the original Apple Watch. Apple has already stopped its original Apple Watch and newer Apple Watch models are not included.
Trade disputes
During a recent earnings call, Tim Cook, Apple CEO, explained how trade disputes could affect the company. Cook said that of the three tariffs introduced on steel, aluminum (and $ 50B of additional goods from China) had no direct impact on Apple’s products. A fourth rate on $ 200 billion in Chinese goods is for public comment, and Cook said that Apple is evaluating this rate and will share details at a later date.
According to Apple, addressing the rates is not the right approach to improve trade agreements. Apple plans to share its vision with the Trump administration. Cook also indicated that he was “optimistic”, the tariff problem will be resolved.