Donald Trump Raises Import Taxes On Goods Made In Vietnam by 500%, Including Macs, iPads & Airpods
President Donald Trump announced today that he’s increasing tariffs on Vietnamese-made goods more than 500% over what they were at the beginning of his administration, a move that’s likely to result in higher costs for the many musicians that use Apple devices:
While the President says in his announcement that Vietnam will pay these taxes, this appears to be a false statement. Tariffs are taxes paid by Americans that import goods.
Tariffs are popular with some politicians, because tariffs can be used strategically to punish bad international actors, and because tariffs can be used to raise your taxes, without it showing up on your annual tax bill. But economists and fiscal conservatives are overwhelmingly against steep tariffs, because they historically have resulted in higher prices, decreased trade and long-term harm to US economic growth.
In this case, the import taxes Apple pays on importing the products it makes in Vietnam are increasing to 20%. So, it seems likely that Apple will pass at least some of the cost of this tax hike on to American buyers.
Apple Insider’s William Gallagher writes:
“The 20% rate that Apple must now pay on imports of the iPad, Apple Watch, and almost all AirPods, is dramatically higher than before. While Trump previously threatened a blanket 46% tariff on Vietnam, prior to his “Liberation Day,” the tariff was less than 4%.”
Why This Matters To Musicians
Musicians tend to use Apple products at a much higher rate than average, because of the company’s traditional focus on content creators.
Musicians tend to use Apple products at a much higher rate than average, because of the company’s traditional focus on content creators.
In addition, the fact that iOS has been optimized to support audio and MIDI effectively and with minimal latency has resulted in it dominating the world of mobile music making applications.
Earlier this year, Apple shifted manufacturing of its products to Vietnam, where possible, in response to the Trump administration’s trade war with China.
At their earnings call in May, Apple CEO Tim Cook said “For the June quarter, we expect Vietnam to be the country of origin for almost all iPad, Mac, Apple Watch, and AirPods products sold in the U.S.”
This move allowed the company to avoid raising prices for American buyers. With Trump’s latest tariff hike, though, it looks like Apple’s strategy won’t allow the company to avoid big tax hikes in the long run on the goods it sells in America.
What do you think of the Trump administration’s tax hike on Vietnamese imports? Do you think it will lead to higher prices on the Macs, iPads and the other devices Apple makes in Vietnam?
Share your thoughts in the comments!
