AAPL: Apple Stock Tumbles 8% as Trump’s Tariffs Set to Hurt Supply Chain from China
1 min read
Key points:
- Apple stock slips in pre-market
- Trump’s tariffs to sting iPhone maker
- Tim Cook’s efforts fail to build bridges
iPhone maker is heavily dependent on its China business where about 90% of its flagship smartphone is produced.
🍎 Apple Shares Get Sliced
- Apple stock
AAPL nosedived more than 8% in pre-market trading Thursday as traders reacted to Donald Trump’s game-changing tariff update. China, where Apple makes about 90% of its flagship product, the iPhone, got slapped with an additional 34% tariff hike, on top of the existing 20% tariffs. And that’s bad news for Apple. - This means that all imports from China will now be charged with an extra 54% duty, making just about everything more expensive to the end user — the iPhone just got more expensive, the iPad and the MacBook, too.
📉 $400 Billion on the Line
- Apple is already paying the existing 20% tariffs on products imported from China. The added tax threatens to strain the tech giant’s supply chain to the point where the levies could eat into sales and dent the bottom line. These are only some of the effects expected to test Apple’s dominant position in the market. Rising inflation leading to sour consumer sentiment is in there, too.
- Apple generates about $400 billion in annual revenue and is currently the most valuable company with a valuation of $3.36 trillion. The stock has been battered this year, largely due to tariff fears, showing an 8% loss ahead of the opening bell today.
📦 Tim Cook’s Dilemma: US or China
- It’s not like Apple CEO Tim Cook didn’t try to avoid all that jam. In late February, Cook promised to dish out $500 billion on investments in the US — building factories, hiring workers, and doing some homegrown R&D. The big initiative, however, didn’t spare his company from getting a slap in the face by the President.
- Outside the US, Cook has been reluctant to move production out of China saying there aren’t as many qualified workers at home. “In the US, you could have a meeting of tooling engineers, and I’m not sure we could fill the room,” Mr. Cook said. “In China, you could fill multiple football fields.”