Fitbit's fitness trackers and a number of other gadgets assembled in China and sold in the United States are now being threatened by new tariffs that will possibly be imposed as part of the ongoing trade war between Washington and Beijing. The U.S. Customs and Border Patrol determined that select products from the San Francisco-based wearable maker can be categorized as data transmission devices and may hence be subjected to the new U.S. tariff regulations that already hit some $36 billion worth of goods. Smart speaker manufacturer Sonos also had some of its products fall under the same label, with Apple Watches being in danger of being burdened by similar measures as well.
The goods from the three technology companies are part of the latest list of tariff codes proposed by Washington which includes approximately 6,000 codes encompassing products valued at some $200 billion. The federal government is still seeking public comments on the measure but may end up imposing a ten-percent tariff on Fitbit, Sonos, and Apple should the move be approved. The part of Sonos's portfolio that's now in danger of becoming more expensive comes down to the Play:3, Play:5, and the SUB smart speakers, whereas Fitbit's Surge, Charge, and Charge HR are in danger of being hit by the same sanction by virtue of the fact that they're entirely assembled in China. All three companies are likely to raise prices of their products should the tariffs become official and are also expected to attempt having them dropped during the currently ongoing public comment period.
Fitbit and Sonos generated $2.6 billion in revenue combined over the course of 2017 and could be significantly impacted by the trade war, with the former already struggling with declining performance and the latter being in the process of preparing for an investor roadshow ahead of its planned initial public offering. The trade war between the U.S. and China is still seeing no end in sight as both sides remain adamant to protect their economic interests. President Trump repeatedly argued the trade deficit the U.S. has with China is unfair, whereas the Far Eastern country accused the White House of starting a fight in which there won't be any winners.