With global tensions rising and a trade war with China appearing inevitable, top American companies are trying to navigate the rough seas. Among them is Apple (AAPL), whose stocks have been heavily affected by the threat of tariffs from the US on Asian countries such as China and Taiwan. Recently, iPhone developers have created the news after flying to the US on millions of iPhones to avoid tariffs. Now, Apple is looking at another major move to protect itself from tariffs and ensure the company’s future growth.
The company is trying to diversify by shifting iPhone production to India and changing wearables and Mac production to Vietnam. Apple is not trying to move production to the US due to high costs, but it could be explored as a last resort. The move would be a small step towards further protection from Donald Trump’s US tariffs. However, the latter threat continues to grow.
Apple has so far off to a rather late start until 2025. Stocks have fallen by more than 15% over the past six months, trading firmly below $200. Furthermore, things could be set to get even worse. Specifically, the White House has revealed that China’s tariffs could reach 245% high amid the brewing trade war. This tariff rise could be a fatal blow to Apple Inc. and its stocks, sending stocks low. Luckily there is still some optimism among investment companies.
According to a recent update to Evercore ISI, Apple Stock (AAPL) could potentially return to the form due to its status. The attractive margin is 46%, and remains the dominant retail tech company. Furthermore, they predicted that the economic impact of China’s tariffs would last, but would sit at around 20%. This creates inflation of up to $8 billion in sales costs (COGS) for the company.
Still, it should be noted that they are one way that companies can reduce this. Although manufacturing in the US is still too expensive, the analysis points out that 35% of the demand for iPhones and iPads could come from India. Moreover, they have already earned exemptions from China’s tariffs, but the escalation of the conflict could threaten it.
