Apple shares: up and down thanks to Trump tariffs
Down low, then up again briefly, then down again, then up again: Apple's shares take full advantage of the dispute over the "Trump tariffs".
Donald Trump at an event: where is the journey going?
(Image: Jonah Elkowitz/Shutterstock.com)
Since US President Donald Trump first imposed his punitive tariffs on almost every country in the world on Wednesday and then paused them again shortly afterwards, Apple shareholders have been experiencing financial whiplash. The iPhone manufacturer's shares had already been on a rollercoaster in the days before. From Thursday last week to Tuesday this week, the shares lost sometimes 5 percent, sometimes up to 8 percent. The back and forth continued in after-hours trading. After the announcement of the pause, the price went up again – confusingly, as the customs tariffs for China were increased again to 125 percent and the main production of the top-selling iPhone takes place there.
Which is more expensive, tariffs or "made in USA"?
On Thursday, Wall Street also realized that the current situation is not (yet) helpful for Apple: the shares fell again by 4.24 percent, and by almost 1 percent in the after-hours trading. Market capitalization now stands at 2.8 trillion US dollars. In the meantime, Apple had been overtaken by Microsoft in terms of market capitalization, but now there is roughly a tie with a slight advantage for Apple, after Microsoft also suffered a loss yesterday due to the (again) reversed stock market climate.
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Trump later said that he believed the production of iPhones in China was "not sustainable" for Apple. However, there has been no announcement that production will take place in the USA. Instead, servers for Apple Intelligence could be built in Texas, just as the expensive Mac Pro was built there. A study by Bank of America came to the conclusion that an iPhone "made in the USA" would be up to 90 percent more expensive than one from China. The higher labor costs alone would increase the price by 25 percent, according to the bankers in an analyst report available to Bloomberg.
Components from China even with tariffs
The US government, on the other hand, is convinced that the iPhone can definitely be manufactured in the USA. Bank of America does not believe that Apple will set up production – unless the tariffs remain in force permanently. And even if the factories are located in the USA, many components would have to be flown in from China, which could then be subject to tariffs again.
Currently, 185 countries are exempt from the punitive tariffs for 90 days. The Trump administration wants to negotiate during this time. By Thursday, Apple shares had fallen by a total of 14%, with the share price having lost 480 billion dollars in the meantime.
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