Saturday, September 8, 2018

Trump Warns That Higher Apple Product Prices are Coming

By Robert Wenzel

The below tweet highlights the lack of understanding of basic economics by President Trump.
He has no idea of the concept of comparative advantage or how tariffs shrink an economy, never mind that they also result in higher prices.

If the United States is importing certain Apple products from China, it means that U.S. workers have more important
things to do than make (or assemble) those products here. If this wasn't the case, the Apple products would be made here in the U.S.

So when Trump imposes tariffs on Apple products, or parts, that are made by China, it will cause a hike in Apple product prices here, and could cause some Apple production, assembly, or part production, to shift to the United States. This will mean that workers will be drained from other sectors to work in the Apple\ Apple parts\assembly making sector. That decline in production in the other sectors results in a shrinking of the economy with less product/services available.

Meanwhile, we all end up paying higher prices for iPhones, HomePods, Apple watches, etc.


Robert Wenzel is Editor & Publisher of

1 comment:

  1. Apple has very large margins on its products. Over the last 20 years Apple products lost physical reason for costing more than the competition. Today the hardware is essentially the same cost if not less than that of the others to make. It's the software that is locked to it that allows them the premium prices.

    Now the question is will Apple take the hit or pass it on? My guess is they are already close to exploiting the maximum possible margin. So this would mean them taking the hit.