Apple, Keurig Dr Pepper, Dollar Tree, Fitbit press US to drop China tariff plan

Apple said that the new round of tariffs would reduce its competitiveness and cut the contribution it could make to the US Treasury.
Apple said that the new round of tariffs would reduce its competitiveness and cut the contribution it could make to the US Treasury.PHOTO: REUTERS

NEW YORK (REUTERS) - Apple, Keurig Dr Pepper, Dollar Tree and Fitbit have joined other companies in filing letters of opposition to a Trump administration plan for more US tariffs on Chinese goods, including iPhones, Macbooks, and single-serve coffee brewers.

The United States and China are resuming talks to end a trade war after more than a month's hiatus. The countries' leaders are expected to meet at the Group of 20 summit in Japan next week.

US President Donald Trump had said he would consider extending tariffs to another US$300 billion (S$407 billion) of Chinese goods if his meeting with Chinese President Xi Jinping does not yield progress on the trade dispute.

The new round of tariffs would reduce Apple's competitiveness and cut the contribution it could make to the US Treasury, Apple said in an online filing on Thursday (June 20).

It said in the document that it is the largest US corporate taxpayer to the US Treasury and reiterated its 2018 pledge to directly contribute over US$350 billion to the US economy over five years.

The tech giant said it would also take a hit because Chinese and other non-US firms do not have a significant US market presence.

"A US tariff would, therefore, tilt the playing field in favour of our global competitors," Apple said.

 
 
 
 

The levies would also hit AirPods, Apple TVs and batteries and parts. Some of these products were spared from the previous round of tariffs imposed last September on US$200 billion worth of Chinese goods, but were put back on the list when Mr Trump decided to prepare tariffs on virtually all remaining imports from China.

Officials are in the fourth of seven days of hearings for US manufacturers, retailers and other businesses to weigh in on the tariff plan. Many individuals and companies have also filed letters and comments to the US Trade Representative (USTR) in an online docket.

COMPLAINTS LIST GROWS

Coffee and beverage firm Keurig Dr Pepper and Apple are the latest in a growing list of US companies pressing the Trump administration to abandon plans to impose tariffs of up to 25 per cent on another US$300 billion of Chinese imports.

Air-conditioner maker Carrier, a unit of United Technologies, said the latest round of tariffs on air-con parts "will result in significant price increases for US consumers of US-manufactured HVAC equipment", making them less likely to replace older, inefficient systems.

The company said it would take 12 to 18 months to find sources for alternative parts, and higher costs may force it to exit lower-priced segments of the air-con market.

Companies such as Dell Technologies, HP and Walmart have already voiced their opposition.

Wearable device maker Fitbit in a letter said tariffs would result in a competitive advantage for Chinese device makers in the US market, sparking "national security concerns by placing sensitive US health, location and financial data within the Chinese government's reach".

Chinese rivals are willing to sacrifice profits to gain market share "in a manner that US companies like Fitbit cannot afford", it said.

FROM COMPUTERS TO COFFEE BREWERS

Some 88 per cent of all coffee brewers sold in the US are imported from China, Keurig counsel said in its public comments. The company's own brewers are in over 28 million homes and more than a million hotel rooms, the letter to the USTR's Office said.

"This is significant, for the manufacturers directly affected and coffee-drinking US consumers who will have no choice but to pay higher prices for coffee brewers, or forgo their daily morning brew," the company said.

Many US companies rely on China to source a vast array of products. Finding alternative suppliers will raise costs, in many cases more than the 25 per cent tariffs, some witnesses have this week told a panel of officials from USTR, the Commerce Department, State Department and other federal agencies.

The proposed list, which will be ready for a decision by Mr Trump as early as July 2, includes nearly all consumer products.

It has been loudly opposed by retailers like Dollar Tree, which is one of the top 50 US employers and seventh largest importer, the company said in its public comments.

"Simply put, the imposition of an additional 25 per cent duty on the types of everyday, household products that we offer will have a significant and disproportionate negative impact on middle- and low-income American households," Dollar Tree said.

The tariffs could also hit Christmas sales hard, particularly cellphones, computers, toys and electronic gadgets.