President Trump's tariff exemption for smartphones, computers etc. may not stick for others, but in our view will stick for Apple Inc. because Trump can't afford iPhones to be collateral damage in U.S.-China trade war. U.S. tariffs on China, at 145%, disproportionately harm U.S. companies more than China; the bulk of value from a $1,000 iPhone to U.S. semi companies. Keeping tariffs that include Apple would also give Chinese smartphone vendors a runway to eat up more of the global smartphone market, which Apple can't afford.
The feared $4,500 iPhone price was based on the Apple Inc. (NASDAQ: AAPL) smartphone being built outside China and with parts not made in China.
Apple (AAPL), Dell Technologies (DELL), and other tech stocks surged in premarket trading Monday, after President Donald Trump imposed a pause on import tariffs on many electronic goods.
In a chaotic weekend that left tech investors scrambling for clarity, the White House appeared to offer - and then swiftly blur - a reprieve from its latest round of tariffs. What began on Friday night with apparent exemptions for smartphones, semiconductors and tech components ended on Sunday with officials insisting those exemptions weren't exemptions after all, just tweaks to the way tariffs are categorised.
Weekend exemptions spared the iPhone titan, but Apple is now at the mercy of Trump.
Apple's shares rose over 6% in Frankfurt after the U.S. granted exclusions from tariffs on smartphones, computers and some other electronics imported largely from China.
Asian tech hardware stocks broadly rose after the Trump administration exempted tariffs on semiconductor equipment, smartphones and other electronics, despite administration officials saying that these tech products would face their own levies.
Tariffs are rattling markets and leading to spikes in volatility. Growth-focused sectors like technology and consumer discretionary are particularly vulnerable given their cyclicality and global exposure.
Shares of Apple (AAPL 3.95%) are currently 26% below their peak from December last year (as of April 10), a drop that has been spurred by ongoing tariff announcements. As of this writing, there is a huge 145% tariff that's implemented on goods leaving China for the U.S. If this remains in place, it could harm Apple, because 80% of its production is still based in China, according to estimates from Evercore.
The CEO managed to help the iPhone avoid another U.S. battle with China.
The United States government is trying to upend global supply chains with China, slapping a tariff rate approaching 150% as of this writing on imports from China into the U.S. Multinational corporations are getting caught in the middle. Apple (AAPL 3.95%) may be the company with the worst exposure.
Warren Buffett has built a fortune in the stock market by playing the long game. Over the last 59 years, his investing skills guided Berkshire Hathaway (BRK.A 1.59%) (BRK.B 1.56%) to an incredible return of more than 5,000,000%.