Over the last few weeks, Donald Trump has implemented a range of sudden tariff adjustments, seemingly increasing and decreasing tariffs at random. The resulting chaos has impacted the stock market significantly while raising numerous unresolved questions regarding the effects these tariffs will have on international trade. This situation escalated to an almost humorous level earlier this year when Trump imposed an immense 145% tariff on Chinese products before reducing it to 30% just weeks later. Meanwhile, Apple finds itself and the iPhone at the mercy of Trump’s erratic tariffs.
For some time, Apple believed it could evade the tariffs in China by shifting a considerable part of its production to India. However, Trump recently stated that this is insufficient. Instead, Trump aims to pressure Apple into producing the iPhone in the United States and has plans to enact a 25% tariff.
Taking to social media last week, Trump expressed the following:
“I have long ago informed Tim Cook of Apple that I expect their iPhones that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else. If that is not the case, a Tariff of at least 25% must be paid by Apple to the US Thank you for your attention to this matter!”
As expected, Apple shares plummeted amidst investor worries that the company would be compelled to increase iPhone prices, seriously affecting iPhone sales. However, it is important to mention that Apple might find it more practical to absorb the tariff costs, maintain iPhone prices, and utilize its substantial cash reserves to cover the tariff.
White House states it doesn’t wish to harm Apple
Amid all these discussions, the White House contends that people are overreacting. During a CNBC interview, National Economic Council Director Keven Hasset minimized what he referred to as a “tiny little tariff” on technology companies such as Apple.
“The bottom line is, what we’re trying to do, is onshore as much as we can in the US and make it so the US is not hyper-dependent on imports from China,” Hassett stated. “And I think one of the things we’re seeing is that people are moving way faster than you might expect.”
Hasset highlighted that the objective is to redirect manufacturing to the United States as much as possible “to ensure the US economy is secure and not susceptible to Chinese extortion.”
