Economy

Trump Offers Tax Break to Apple to Build in US

Trump Offers Tax Break to Apple to Build in US

According to Bank of America Merrill Lynch, if Apple shifted production to the U.S.to avoid new tariffs, as Trump proposed on Twitter, U.S. consumers could be paying 20% more for their devices. On Sunday, Trump again weighed in on the company's manufacturing strategy, tweeting that the Ford Focus Active crossover "can now be BUILT IN THE U.S.A. and Ford will pay no tariffs!". "This vehicle can now be BUILT IN THE USA and Ford will pay no tariffs!".

"If the United States insists on imposing another round of tariffs on Chinese products, China will definitely take countermeasures to safeguard its legitimate rights and interests", foreign ministry spokesman Geng Shuang said. He added that he's ready to place yet another round of tariffs on $267 billion in Chinese goods after that - bringing the total imports from China subject to tariffs to more than $500 billion.

Hong Kong stocks suffered the sharpest losses, falling 1.3 percent in the morning, while Shanghai slipped 0.8 percent with news that China's surplus with the United States hit a record in August adding to concerns Trump will push ahead with the tariffs.

Ford last month cancelled plans to import its Focus Active crossover vehicle into the USA from China because Trump's tariffs have undermined the business case for a vehicle with expected annual domestic sales of fewer than 50,000 units. These tariffs could drive up costs for a host of companies that sell equipment in the U.S. market, and not just Apple.

"If Trump's trade policy is created to stop the global supply chain from functioning the way it historically has, then that's a victory for Trump's trade policy", said Claire Reade, a former assistant U.S. trade representative for China affairs, who served in the administrations of George W. Bush and Barack Obama.

Mobile phones, the biggest U.S. import from China, have so far been unaffected but would be engulfed if Mr Trump activates the $267bn tariff list.

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We are still waiting for the "three big plants" that Trump previous year claimed Apple chief executive Tim Cook had promised to build. The Trump administration levied 25 per cent duties on US$34 billion of Chinese imports in July, including motor vehicles.

Trump, who is challenging China, Mexico, Canada and the European Union on trade issues, has now expressed displeasure about his country's large trade deficit with Japan.

Despite opposition from lawmakers at home and overseas, Trump has insisted the tariffs are necessary to secure improved trade deals. He then asked it to "start building new plants now". These tariffs have since been extended to an additional $16 billion in Chinese goods and in the near future, will be applied to another $200 billion in goods.

The retail sector has continued to feel the chill wind of changing consumer spending habits, with Debenhams share price under pressure once more, on reports that the struggling business is embarking on yet another attempt to turn the business around, appointing KPMG to look at measures to shore up its finances.

In China, labor costs for motor vehicle and parts manufacturing are about $8 per hour including benefits, but it's more than $52 per hour in the US, according to Dziczek.


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