AdminiUS President Donald Trump's administration unveiled the full scope of the new tariffs at a press conference today, which could have far-reaching consequences. The new tariffs will hit many major companies, including the tech giant Apple.
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Apple relies heavily on its supply chain to manufacture and assemble equipment in countries such as China, India, Malaysia and Vietnam. These are the regions that will now be targeted by high tariffs, leading to higher production costs, reduced margins and potentially lower profitability.
New tariffs and their impact
Trump announced the imposition of a 10% base tariff on all imports into the US, which will have significant economic consequences in itself. The rate will take effect on Saturday, April 5th.
Even more serious, however, are the so-called “reciprocal tariffs” that will be imposed on selected countries where American exports are artificially made more expensive by foreign governments. These rates will take effect on April 9th, and some of them will be extremely high.
Among the regions most affected is China, where most iPhones are manufactured, which will now face a total tariff of up to 54% (a 34% reciprocal tariff on top of the original 20% tariff from January this year).
Similar impacts are expected in other key manufacturing areas:
- Vietnam, where they are produced AirPods, Apple Watch a MacBooky, will face a duty of 46%.
- India, an important supplier of iPhones and other products, will be hit with a 26% tariff.
- Malaysia will face tariffs of up to 24%.
- Other countries involved in the supply chain Appwill be burdened miniat least 10% rate.
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Impacts on Apple and the market
If Trump's plans actually go into effect, they will have a significant impact on business Applu. Increased production costs can lead to two main consequences: either Apple absorb losses by reducing its margins, or it will be forced to raise the prices of its products, which could discourage customers and reduce demand.
These concerns were immediately reflected in the stock market. Applu fell by more than 7% in the after-trading phase after the announcement. Apple closed the day at $223, but in subsequent trading it hovered around $207. The decline also affected other large technology companies, causing an overall market decline.
The future and possible exceptions
Some analysts believe that Trump's measures are just a bargaining tool and some of them will soon be eased. During the 2018 US-China trade war Apple managed to negotiate exemptions for several of its products, most notably iPhones. However, this time the company was not successful and all indications are that the tariffs on Apple they will remain in full force.
