Apple's stock and market cap continued to dwindle on Monday after Donald Trump threatened to impose an additional 50 percent tariff on China (via Reuters), a country where most of Apple's products are made and exported to the United States.
While the stock market could recover some of its value on Monday, Apple's market cap lost another 3.7 percent, bringing its three-day loss to a staggering 19 percent. Over the past three trading days, Apple has lost a monumental $638 billion in market cap, marking one of the biggest slides in the company's history.
Before the Trump administration announced new tariffs on countries, each Apple share traded at $223.89. However, after Apple's main suppliers were hit with hefty tariffs, the company's shares dwindled to $181.46.
In the looming trade war between the United States and China, Apple is one of the firms that has taken the biggest hit. Currently, China dominates Apple's supply chain, and most of the company's high-end phones and devices are produced by Chinese manufacturers. While Apple has tried to move production away from China and shift to India, Vietnam, and Brazil, the process of ditching China from the supply chain is uncertain and could take many years, if not impossible.
China's imports to the US were hit with a 54 percent tariff. In response, China imposed a 34 percent tariff on its imports from the US (via CNN). However, Donald Trump threatened that if China does not lift retaliatory tariffs on US products, it will be punished by an additional 50 percent tariff. If this were to happen, tariffs on China's imports could reach over 100 percent, which would be a significant blow for companies like Apple that rely on overseas manufacturers.
Analysts predicted Apple might need to increase iPhone prices by 43 percent to compensate for the new tariffs. Shifting iPhone production to Brazil, which is hit with only a 10 percent tariff, is another pathway for Apple to evade paying hefty taxes on its imports to the US.
Via: CNBC
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