Tech lobby group urges Trump to end ‘mutually damaging trade war’ after iPhone sales hit by China slowdown

A Washington lobby group representing Apple, Google, Samsung Electronics and other global tech giants has called on the Trump administration to end the “mutually damaging trade war” with China after America’s most recognised tech brand became the latest example of collateral damage amid ongoing Sino-US trade tensions.

Apple on Wednesday lowered its first-quarter revenue outlook, following weaker than expected iPhone sales and a slowing economy in China. In a letter to investors, Apple chief executive Tim Cook said the economic deceleration, particularly in Greater China, was worse than expected because China’s economic environment had been further impacted by rising trade tensions with the US.

Voicing support for Apple, the Washington-based Information Technology Industry Council, known as ITI, issued a statement urging the Trump administration to work towards a long-term solution and roll back tariffs on China and end the trade war that was damaging both sides.

ITI’s move comes amid the ongoing trade dispute between the world’s two biggest economies. Beijing and Washington agreed in early December to temporarily put on hold any escalation of tariffs but US tariffs on Chinese imports are set to rise if an agreement between the two countries cannot be reached by March 1. Prior to the temporary truce, China and the US had been threatening each other with tariffs on billions of dollars worth of imports.

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“Tariffs are a direct threat to American workers and companies, hindering economic growth and slowing hiring for tech and other sectors,” said Josh Kallmer, executive vice-president of policy at ITI, which lobbies on behalf of global tech giants on issues that affect them broadly.

“We urge the Trump administration to continue its critical negotiations with the Chinese government and work toward a long-term solution that rolls back tariffs, changes China’s unfair trade policies, and ends this mutually damaging trade war,” Kallmer said in the statement.

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Apple’s weaker-than-expected performance is the latest evidence that the trade war could backfire on the US, making it harder for President Trump to defend his assertion that long-term gains from imposing tariffs on China justify the short-term pain for consumers and investors.

Apple lowered its revenue guidance for the first quarter ended December to US$84 billion, down from the US$89 to $93 billion it had previously projected. The company lowered gross margin projections to about 38 per cent from between 38 per cent and 38.5 per cent.

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Chinese tech companies have also been hurt by the trade dispute between the two countries. On Wednesday, Baidu chief executive Robin Li Yanhong warned that “winter is coming” as China’s economy shifts to a lower gear, while Foxconn Technology Group, which employs 1 million workers in China and manufactures Apple’s iPhones, earlier admitted the trade war was its biggest challenge this year.