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Trump tariff threat could further hurt embattled Apple

November 2018 has turned out to be a month that Apple would love to forget. Its share price at one stage dropped by nearly 25% from earlier highs – and Donald Trump’s threat this week to introduce a 10% tariff on Apple’s smartphones and laptops manufactured in China only made things worse.

Trump issued this threat on Monday while speaking to the Wall Street Journal. He added that it was very unlikely that he would postpone the planned $200bn in new tariffs on products imported by the US from China unless that nation would “open up their country to competition from the United States”.

Regarding Apple, Trump stated that although he was worried about how American consumers would react to higher prices on computers and smartphones, he believed that within reason, they would still buy the things they really wanted.

He added: “Depends on what the (tariff) rate is. I can make it 10 percent and people could stand that very easily.”



Wedbush Securities’ Director of Equity Research Dan Ives warned that Wall Street would not be happy with this news. He added: “This tariff threat on iPhones out of left field from Trump and the Beltway will surely add to this white knuckle period for Apple.”

UBS Analyst Timothy Arcuri believes that if Trump slaps Apple with new tariffs, it would start in January, thus impacting three quarters of the firm’s fiscal year, which started in October.

Apple’s share price has dropped around 22% since the firm issued its latest quarterly results on 1 November 2018. Those results included lacklustre iPhone sales and revenue projections that displeased investors. Afterwards, Apple made a U-turn and said that from now on, it would no longer release any information about sales of individual products such as iPhones, Macs or iPads.

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