Apple is facing significant challenges due to new tariffs imposed by the Trump administration, despite the company’s extensive efforts to shield itself from the impacts of trade conflicts and supply chain issues.
The recent announcement of tariffs has raised alarm among investors, leading to a sharp decline in Apple’s stock during after-hours trading on Wednesday. The reciprocal tariffs — levies on imported goods in retaliation to existing tariffs — are set to reach 34 percent for imports from China. When combined with previously imposed tariffs, the overall rate on Chinese goods will rise to 54 percent, posing serious risks to Apple’s supply chain, which remains heavily reliant on China.
Additionally, the tariffs extend to other countries where Apple has manufacturing operations, complicating efforts to lessen dependence on China. Currently, while the majority of its products sold in the U.S. are still manufactured in China, Apple has expanded production to various international locations.
- In India, where Apple has ramped up the manufacturing of iPhones and AirPods, a 26 percent reciprocal tariff will be imposed.
- Vietnam, a key site for the production of AirPods, iPads, Apple Watches, and Macs, will face a 46 percent tariff.
- Malaysia, where Mac computers are increasingly assembled, will encounter a 24 percent tariff.
- Thailand, which also produces some Macs, will see a 36 percent levy.
- In Ireland, part of the European Union, a 20 percent tariff will apply to some iMacs manufactured there.
The tariff announcements have unnerved investors as concerns mount about their potential negative impact on Apple’s financial performance. Shares fell as much as 7.9 percent in after-hours trading, and prior to this decline, the stock had already decreased by 11 percent this year amidst a wider downturn in the technology sector.
The White House has stated that the new tariffs will take effect on April 9. An Apple representative did not provide a comment regarding the matter.
Further complications for Apple could arise from its reliance on components sourced from various regions now also affected by tariffs.
Analysts from Bloomberg Intelligence note that the new tariffs are expected to compress Apple’s profit margins, as the company is unlikely to raise prices to mitigate the financial strain. If it decides to increase prices, this would occur amid a period of uncertain consumer sentiment.
During his first term, Apple’s CEO Tim Cook successfully lobbied for the exclusion of the iPhone and some other products from tariffs, arguing that such measures would disadvantage American manufacturers while benefitting its South Korean rival, Samsung Electronics Co.
Earlier this year, Apple attempted to improve relations with the Trump administration by announcing a commitment to invest $500 billion in the U.S. over the next four years. This investment plan slightly accelerates Apple’s investment rate under President Joe Biden when adjusted for inflation. Among these initiatives, Apple mentioned plans to produce some artificial intelligence-related servers in Texas and has begun manufacturing a limited range of chips at a facility in Arizona.
Currently, Apple engages in minimal mass production within the U.S. It markets the Mac Pro model, starting at $6,999, as being built in Texas. However, sales are limited, and many of its components are sourced from China and other countries.
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(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
