Photo: NYT estimates Apple equipment may become more expensive due to Trump's new tariffs (Getty Images) Author: Natalia Gurkovskaya
The administration of US President Donald Trump is introducing new tariffs. They, in particular, could hit the business of Apple.
RBC-Ukraine reports this with reference to The New York Times.
“The proposed tariffs threaten to add to the pressure on Apple's business. The company already faces 20% tariffs on products imported from China, where Apple makes about 90% of the iPhones sold worldwide,” the publication writes.
The fact is that when Trump first imposed tariffs on goods from China in 2018, Apple began moving iPad and AirPods production to Vietnam and iPhone production to India.
Two options for Apple
As journalists specify, the Apple representative declined to comment. At the same time, the authors of the article do not rule out that the costs of duties “could put Apple's business in a dead end.”
“The iPhone, iPad and Apple Watch that the company sells account for three-quarters of its nearly $400 billion in annual revenue. Since Trump has said he will not allow products to be exempt from tariffs, Apple will either have to pay those tariffs, which will reduce its profits, or indirectly pass those extra costs on to customers by raising prices,” the publication believes.
The article also cites the following statistics: According to Morgan Stanley, tariffs on iPhones and other devices imported from China will add $8.5 billion to Apple's annual costs without any relief from the Trump administration.
“That would cut the company's earnings next year by $0.52 a share, or about $7.85 billion. That would be about 7 percent of next year's profit,” The New York Times writes.
Apple stock falls
Apple shares fell 5.7% in secondary market trading after Trump's comments.
“Apple will take these new tariff numbers and plug them into the models they've created and within hours they'll know how big of a problem they have,” said Anna-Katrina Shedlecki, the founder of Instrumental, who previously worked at Apple.
It's not just Apple that may be in trouble
Most other tech companies are also likely to feel the impact, either directly or indirectly.
“Google and Microsoft, for example, are not as dependent on international suppliers, but they have significant consumer electronics businesses,” the NYT notes.
And tariffs could increase the cost of building the huge new data centers that companies plan to build to create new artificial intelligence technology.
Trump's New Tariffs
US President Donald Trump announced massive tariffs on US imports on April 3. The tariffs are likely to affect trillions of dollars in trade.
Thus, the announced duties range from 10% to 49% on imported goods. In particular, the United States is introducing a separate tariff on imports from Ukraine in the amount of 10%. This is the level of the lowest basic duty for countries in relation to which such tariffs are introduced.
For more information on Trump's new tariffs, read the RBC-Ukraine article.
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