Apple Inc. is currently facing significant challenges due to new tariffs imposed by President Donald Trump, despite its lengthy efforts to shield itself from the effects of trade conflicts and supply chain issues. The recent announcement from the White House includes a series of tariffs that are particularly detrimental to the company, leading to a sharp decline in its stock price. The newly instituted reciprocal tariffs—a tax on imports in retaliation to existing tariffs—will reach 34% on goods from China, resulting in a total tariff rate of 54% that threatens to disrupt Apple’s supply chain, heavily reliant on China.
Additionally, these tariffs impact Apple’s manufacturing operations in other countries, undermining its attempts to reduce reliance on Chinese production. While a majority of devices sold in the U.S. are still manufactured in China, Apple has expanded its production capabilities globally.
– India, where Apple has been ramping up production of iPhones and AirPods, will face a 27% reciprocal tariff, slightly higher than the previously announced 26%.
– Vietnam, which manufactures some AirPods, iPads, Apple Watches, and Macs, will see a 46% tariff.
– Malaysia, increasingly a site for Mac computer production, will be subject to a 24% tariff.
– Thailand, another location for Mac assembly, will have a 37% levy.
– Ireland, part of the European Union, will have a 20% tariff, affecting some iMac production.
Apple’s operations may be further compromised due to the necessity of sourcing components from various countries facing tariffs. An Apple representative did not provide a response to requests for comments.
The tariffs sent shockwaves through the investor community, raising alarms about their potential impact on Apple’s financial performance. Upon the markets’ opening in New York on Thursday, Apple shares plummeted by 8.5%, wiping out $255 billion in market capitalization. Prior to this drop, the stock had already declined by 11% this year up to Wednesday’s close, amidst a broader downturn in the tech sector.
This situation highlights the vulnerability of global technology firms that rely on suppliers and manufacturers in Asia, severely affected by Trump’s tariff decision. The White House announced that these new tariffs will take effect on April 9.
Dell Technologies Inc., known for one of the industry’s most extensive supply chains, also experienced a significant drop of up to 15% in its stock price following the announcement. The company has indicated that it may need to adjust its pricing strategies in light of the new tariffs.
