Apple asks U.S. to waive tariffs on Chinese-made watches, iPhone parts, AirPods

[November 02, 2019]  By David Shepardson

WASHINGTON (Reuters) - Apple Inc asked the Trump administration to waive tariffs on Chinese-made Apple Watches, iPhone components and other consumer products, according to company filings with the U.S. Trade Representative's Office.

The company on Thursday sought tariff exclusions from 11 products, including HomePod speakers, iMac computers, parts for use in repairing iPhones, iPhone smart battery cases, AirPods and others. The public has until Nov. 14 to submit comments on the requests.

Apple told the U.S. Trade Representative's Office the products were consumer electronic devices and "not strategically important or related to 'Made in China 2025' or other Chinese industrial programs."

The exclusions seek relief from 15% tariffs that took effect on Sept. 1.

FitBit Inc asked the administration to waive tariffs on its fitness trackers. The company told the administration "the vast majority of global production capacity for wrist-wearable communications devices is in China."

The company added that "while Fitbit is aware of facilities currently producing such devices in Taiwan and South Korea, these facilities are fully owned by, or otherwise contracted to, Fitbit competitors that use them for their own branded production, rendering them unavailable to Fitbit." Alphabet Inc announced Friday it has reached a deal to acquire Fitbit.

A man shows the new model of Apple Watch during the opening of Mexico's first flagship Apple store at Antara shopping mall in Mexico City, Mexico September 27, 2019. REUTERS/Luis Cortes

Apple submitted the requests on the first day the Trump administration began accepting them. An Apple spokesman did not immediately comment.

Apple's wearables and accessories business - which includes the Apple Watch, AirPods and HomePod - brought in $24.5 billion in its fiscal 2019 ended in September, or about 9.4% of Apple's revenue. Sales in the segment were up 41% versus the prior year, and the devices have become an important driver of Apple's business as iPhone sales declined for the past four straight quarters.

Apple chief executive Tim Cook said Wednesday on the company's earnings call the company is paying "some tariffs today, as you know, some that went into effect pre-September and some others that went into effect in September. So we are paying some."

Christie's Inc has asked the administration waive tariffs on Chinese sculptures, statues, paintings, antique furniture and silverware and other collectible items.

Sea Eagle Boats Inc submitted requests to waive tariffs on inflatable stand up paddleboards.

(Reporting by David Shepardson, additional reporting by Stephen Nellis in San Francisco Editing by Franklin Paul and David Gregorio)

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