The threat of increasing import duties on goods from China to the United States to 54% is obvious to Apple, which has been building supply chains from this country for years. According to experts, the cost of an iPhone in the United States could increase by $350 due to duties. Investors sensed the danger for Apple’s business, as a result of which the company’s capitalization fell by 19% or $638 billion in three days.
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Monday was the least bad day for Apple shares, as they fell only 3.7%, but in total they fell 19% in three trading sessions, wiping out $638 billion in the company’s market cap. What’s unique about the situation is that China is not the only country to be hit by tariff increases for US imports. India, Thailand and Vietnam have also been hit by tariffs imposed by Donald Trump, so the impact on Apple’s operations will be inevitable.
Last week, the Nasdaq index fell 10% overall, showing its worst performance in almost five years, but on Monday, the quotes went up. If an expensive iPhone model in the US currently costs $1,199, as UBS analysts argue, then after the introduction of duties it could go up by at least 30% or $350. Apple will either have to raise prices for its products in the US or sacrifice profits. In the latter case, specific income per share could fall by 15%.
If the iPhone 16 Pro Max goes up in price by $350, the iPhone 16 Pro, which currently sells for $999, will go up in price by $120, according to UBS representatives, but only if the smartphone is made in India rather than China. Most Apple smartphones are made in China, but unofficial sources have reported that the company sent several planeloads of iPhones and other devices, including those made in China, from India in late March to build up an increased stock of finished products in the United States before tariffs are raised.
As Wedbush representatives have already noted, if Apple had to move iPhone production to the US, the cost of the smartphone on the local market would increase to $3,500. Morgan Stanley analysts have suggested that Apple will have to lose up to $34 billion annually due to the growth of duties in the US. It will have to increase the cost of its products on the local market by an average of 17 or 18%, according to experts. Whether Apple will be able to obtain benefits from the US authorities remains a big question, but attempts are being made.