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Apple Faces $1.4 Billion Tariff Impact, Smartphone Prices to Risewww.theaustralian.com.au/business/technology/smartphones-prices-to-soar-more-than-30pc-as-apple-reveals-14bn-tariff-hit/news-story/91078caa9b3f40497bb5c7651dce4777
62 sats \ 7 comments \ @Jerrian_thedeep 12 May econ
Apple has revealed a $1.4 billion hit from tariffs, primarily due to its reliance on China, which now faces a 145% tariff. In response, Apple is shifting production of devices intended for the U.S. market to India and Vietnam to mitigate the impact.
The Consumer Technology Association warns that these tariffs could cost American consumers up to $123 billion annually, potentially resulting in $69 billion in overall economic losses. Experts suggest failing to diversify could drastically increase Apple product prices globally.
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0 sats \ 6 replies \ @Undisciplined 12 May
Experts suggest failing to diversify could drastically increase Apple product prices globally.
If there's a huge reduction in American demand, and supply curves are upward sloping, the rest of the world should receive cheaper Apple products.
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32 sats \ 5 replies \ @Jerrian_thedeep OP 12 May
If U.S. demand crashes and supply is sticky or upward sloping, Apple has excess inventory. To clear it, prices elsewhere should drop. But in reality, Apple cuts production, controls pricing, and practices regional price discrimination. So cheaper iPhones abroad? Unlikely.
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0 sats \ 4 replies \ @Undisciplined 12 May
Cutting production is part of the slope of supply curves.
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22 sats \ 3 replies \ @Jerrian_thedeep OP 12 May
But adjusting output in response to price changes is what gives the supply curve its upward slope.
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0 sats \ 2 replies \ @Undisciplined 12 May
I know. That's what I'm saying. They will respond to a leftward shift in the demand curve (loss of American demand from tariffs), by reducing output along their upward sloping supply curve, resulting in lower prices.
The only way to get prices to rise is with a shift in their supply curve and I'm not sure what the argument is for that.
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29 sats \ 1 reply \ @Jerrian_thedeep OP 12 May
Right but the key is that the supply curve itself might shift too. Apple’s shift to India and Vietnam isn't frictionless new production costs, supply chain inefficiencies, and geopolitical risks can all raise marginal costs. That’s an upward supply shift, which can lead to higher prices globally, even with falling U.S. demand.
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