In terms of tariffs themselves, our view is that they show up as a tax on the consumer and wind up resulting in lower economic growth and sometimes can bring about unintended consequences. There are lots of good things happening in China. This the fourth consecutive quarter of double digit growth in China. Apple has repeatedly outlined the effects a trade war would have on its business, and this is seemingly some of those effects coming to fruition - unfortunately it didn’t foresee these effects when it released its last quarterly forecast. Later in the letter, Cook acknowledges that Apple “can’t change macroeconomic conditions,” and that’s especially true about the effects of the trade war on Apple’s performance in China. We are right now taking in $billions in Tariffs. It will always be the best way to max out our economic power. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. Of course, Apple isn’t the only company facing the effects of the trade war – and Cook even acknowledges that the smartphone market as a whole is down in China. Seemingly, Apple is blaming the US vs China trade war – initiated strategically by President Trump – for its own struggles in China. And market data has shown that the contraction in Greater China’s smartphone market has been particularly sharp. As the climate of mounting uncertainty weighed on financial markets, the effects appeared to reach consumers as well, with traffic to our retail stores and our channel partners in China declining as the quarter progressed. We believe the economic environment in China has been further impacted by rising trade tensions with the United States. While Cook first notes that the government-reported GDP growth during the September quarter in China was the second-lowest in the last 25 years, his main focus is on trade. There is a lot to break down in the letter, but here are four key things to take away…Ī good portion of Tim Cook’s letter focuses on Apple’s issues in China, which the Apple CEO attributes in large part to the ongoing trade war between China and the United States. Tim Cook today published a letter addressed to Apple investors in which he announced that Apple is revising its guidance for its first quarter of fiscal 2019 - i.e.
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