Apple’s CEO, Tim Cook, Centro, observes during the opening ceremonies for President Donald Trump, to the right, and Vice President JD Vance, on the left, in the roundabout of the United States Capitol in Washington, on January 20, 2025.
Shawn thew | AFP | Getty images
In recent years Apple He has sold American iPhones manufactured in India, Vietnam Airpods and Mac Desktops gathered in Malaysia. It was part of an Apple strategy to diversify its manufacture from China.
Apple used the strategy as a coverage for its supply chain after the company dealt with the tariffs of the first Trump administration, supply chain problems linked to the shortage of COVID and Chip that revealed the risk in which the company was mainly producing outside China.
It seemed a solid strategy. Until the “reciprocal tariffs” of President Donald Trump also arrived in those countries this week.
Now, Apple leads the decrease between technology shares on Thursday after the company’s secondary production locations were included in the Trump’s Round Round on Wednesday.
The company’s shares fell more than 9% on Thursday compared to a 6% decrease for NASDAQ. That eliminated more than $ 300 billion in market capitalization for the iPhone manufacturer and was the worst one -day performance for shares since March 2020.
“When you look at the reciprocal tariff to countries such as markets such as Vietnam, India and Thailand, where Apple diversified its supply chain, there is no place to escape,” said Morgan Stanley analyst Erik Woodring, “Celling Bell” of CNBC.
To compensate for the price of rates, Apple may have to increase prices in its product lines by 17% to 18% in the US., Estimate wood. But there is still a lot of uncertainty about what Apple will do and how China could retaliate against the United States, Woodring said.
“In this type of environment, you must think about the worst case,” he said. “It seems that every side in this geopolitical scenario is digging.”
Apple did not respond to a request for comments on Thursday on its reaction to Trump’s tariffs or if prices could increase in the US. UU. Nor has he commented on the reported meetings of CEO Tim Cook with Trump this year or what they have discussed.
“We are monitoring the situation and we have nothing more to add than that,” Cook told analysts about a gain call in January.
Apple could still obtain product exemptions on US rates, similar to the way it sailed tariffs in China during the first Trump administration. But if not, tariffs will threaten their business.
An employee works in Factory of Rising Stars Mobile India Pvt., A Foxconn Technology Co., in Sri City, India, on July 11, 2019. FoxConn, also known as Hon Hii Precision Industry Co., opened his first Indian factory four years ago.
Karen days | Bloomberg | Getty images
“Substantially all” of Apple’s manufacturing are made in China, India, Japan, South Korea, Taiwan and Vietnam, according to a financial presentation in November. Apple warned investors that tariffs could damage their business, boost it to increase its prices and even force it to stop offering certain products completely.
The official Apple suppliers list, which represents 98% of its expenses in materials, manufacturing and assembly, is very weighted to the countries disproportionately affected by Trump’s tariffs.
India has a 26%rate, Japan obtained a 24%service, South Korea is 25%, Taiwan is 32%, Vietnam obtained 46%of rates and Malaysia received a 24%rate. Meanwhile, China now has a rate rate of 54% after the 34% increase on Wednesday with its existing 20% ​​rates.
“The impact can be particularly significant if these restrictive measures apply to countries and regions where the company obtains a significant portion of its income and/or has significant operations of the supply chain,” Apple wrote in the presentation.
Tariffs are destined to return manufacturing to the United States, Trump said. He specifically cited Apple during his announcement, saying “they will build their plants here.” Apple has made a high -end desktop computer called Mac Pro in Texas, but the vast majority of its final assembly takes place abroad.
The US investment of $ 500 billion of Apple, promoted by Trump on Wednesday, includes planned purchases of US pieces and chips, but the company has not committed to manufacture its high volume products on the US coast.
The company’s resistance to make the final manufacture in the US. It is a long data position for the company. In 2011, Apple’s late founder Steve Jobs told former President Barack Obama that “those works do not return” when asked about the iPhones made in the United States.
Analysts agree that it is unlikely, since it would be expensive for Apple to bring its supply chain to the US.
“The reality is that it would take 3 years and $ 30 billion in our estimate to move even 10% of its Asia supply chain to the United States with an important interruption in the process,” Wedbush analyst wrote, Dan IVES, in a Thursday note.
Apple investors will want to know how much Trump’s rates will harm the company’s profits.
Earlier this year, several analysts predict relatively small decreases in profits by the company under a new commercial regime, partially based on the assumption that Apple could use its secondary production locations to avoid tariffs on US goods imported from China.
Now, analysts are trying to model how Apple could balance price increases to their products instead of eating additional costs themselves. Apple often does not increase prices outside a new introduction of products, and it is expected to set new phones in September.
“Without a doubt, if the tariffs adhere, it will have a negative impact on Apple’s foundations, with the disadvantage of margin and profits expectations,” wrote the research analyst of CFRA, Angelo Zino, in a note on Thursday.
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