During the run-up to the election, Trump repeatedly called for “defensive” tariffs of up to 45% on Chinese imports, but failed to detail how such a plan would work. Should any such policy be imposed, China would take a “tit-for-tat approach” and stop buying American products, according to an opinion piece in the Communist-backed Global Times.
“A batch of Boeing orders will be replaced by Airbus,” the editorial said. “U.S. auto and iPhone sales in China will suffer a setback, and U.S. soybean and maize imports will be halted. China can also limit the number of Chinese students studying in the U.S.”
However, the Global Times is not convinced that Trump will actually make good on the proposed tariff, calling the move “merely campaign rhetoric” and questioning its legal validity. U.S. law forbids presidents from imposing tariffs of more than 15% for a maximum of 150 days on all imports.
Data released by the Chinese government suggested that about 131 million of its citizens used iPhones at the end of 2015, more than any other manufacturer. Apple held 16.8% of the market, a greater share than Samsung, and 1.2% more than China-based Xiaomi.
The Global Times article, which was released shortly after a recent call between Trump and Chinese President Xi Jinping, concluded: “If Trump wrecks Sino-US trade, a number of US industries will be impaired. Finally the new president will be condemned for his recklessness, ignorance, and incompetence.”
Foxconn, a Taiwanese multinational electronics company that employs nearly 1.5 million workers, is Apple’s main site for iPhone production. If Trump makes good on his threat to impose tariffs, China could step in and halt or even permanently discontinue production of the device.
Don’t fret, iPhone levers, as this is an unlikely outcome considering how hard it would be for any president — even Trump with a Republican-controlled Congress — to unilaterally impose a 45% tariff.
Source: Reuters