Trump’s latest tariffs could hurt Apple
Apple (AAPL) stock has fallen nearly 5% since September 4 after a stellar rally following its announcement of its fiscal third-quarter earnings results.
The rally stopped after investors worried that the latest round in the US-China trade war would affect the iPhone maker’s suppliers, who are mostly based in China.
The Trump administration’s latest proposal in the trade war dispute would see a 25% tariff imposed on a number of the tech giant’s products, including the Mac mini, the Apple Pencil, AirPods, and the Apple Watch.
Analysts warn that the trade war could affect Apple quite significantly. Around one-fifth of Apple’s revenue comes from China.
Apple faces another headwind in the short term
The iPhone’s average selling price in the fiscal third quarter was high enough to offset sluggish year-over-year iPhone unit sales. However, in the coming quarters, this high average selling price may not lead to robust iPhone revenue growth due to higher baselines. However, if Apple’s latest iPhone gains traction, that could change.
These factors pose headwinds for Apple stock—in the short term, at least. It will be interesting to see how the launch of Apple’s new products will affect its stock.