ibusinesslines.com
ibusinesslines.com November 14, 2018


U.S., Europe optimism helps global stock index dodge trade war dread

11 September 2018, 05:27 | Kelvin Horton

Supplied Ford Focus Active the small crossover causing so much controversy in the US

Ford Focus Active the small crossover causing so much controversy in the US

The business news network obtained a research note from Merrill Lynch issued Monday responding to a tweet from the president urging the tech giant make its "products in the United States instead of China".

Apple has written a letter to the Trump administration, saying the proposed $200 billion tariffs on China-made products will make the Apple Watch, AirPods headphones, HomePod smart speaker, Macs and key computer parts more expensive.

The company said about 80% of the vehicles Ford sells in the United States are built domestically. Trump said Friday he is considering another $267 billion of tariffs on China, which analysts said will affect virtually every category of consumer goods, to retaliate against what he calls unfair trade practices.

The Trump administration has imposed tariffs of $50 billion on imports from China, mostly equipment and material used by manufacturers.

The tweet directed at Apple clearly suggested the company should make products in USA instead of China if they want to avail "zero" tax.

"Ford has abruptly killed a plan to sell a Chinese-made small vehicle in the USA because of the prospect of higher US tariffs.' CNBC".

Technically, that's true. Ford can build the Focus Active at a domestic plant, just like it can give the next Ford Mustang Shelby GT500 a manual transmission. The higher expense of USA labor would likely boost the price of Apple products by 20 percent, CNBC.com reported, citing Bank of America Merrill Lynch.


"The margins are very slim", Dziczek said.

The automaker emphasized that it already has a substantial manufacturing presence in the U.S.

Loup Ventures analyst Gene Munster predicts the tariffs would only cause Apple's revenue to drop by 5% in 2019 because the amount of money the affected products make is such a small slice of the company's money-making machine.

There was a "logical gap" in Trump's statement that the auto not being imported to the U.S. somehow meant it could be built in the United States cost-effectively, said Reade, who now advises clients on USA and Chinese governmental issues at the Washington-based law firm Arnold & Porter.

Analyst Wamsi Mohan said that if Apple moves 10% of its iPhone assembly to the United States, prices will rise by 8%.

The world's two biggest economies are clashing over US allegations that China deploys predatory tactics - including outright cybertheft - to acquire technology from USA companies and challenge American technological dominance.



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