Did Trump Just Undermine Apple’s China Recovery Plan?


May. 22 2019, Published 3:32 p.m. ET

Apple slashed prices to boost sales in China

Apple (AAPL) is attempting a recovery in China, where tough economic times and tight competition from local brands have caused the company to post declining revenue from the country in recent quarters. In response, Apple has slashed prices of its products, mostly the iPhone, to boost sales in China. Last month, Apple CEO Tim Cook told Reuters that the company was beginning to see iPhone sales improve in China after the price cuts.

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But recent decisions by President Donald Trump’s administration to hit China with a new round of import tariffs and blacklist Huawei as a national security risk threaten to undermine Apple’s recovery efforts in China. According to a report by BuzzFeed, Chinese consumer sentiments have soared against certain American brands after Trump escalated the trade war with China and restricted Huawei’s business dealings with American companies. The report stated that there are calls to boycott Apple products in China, with those calls growing louder after Google (GOOGL) said it was scaling back its business deals with Huawei following the company’s blacklisting by the American government.

America running anti-Huawei 5G campaign

The Trump administration is running a global campaign to persuade its allies to block Huawei from supplying equipment for their 5G networks. In the United States, leading operators such as AT&T (T) and T-Mobile (TMUS) have so far bypassed Huawei to place orders for 5G equipment with rivals Ericsson (ERIC) and Nokia (NOK). The America-led anti-Huawei campaign further puts Apple in an awkward position in China. Apple’s revenue from China dropped nearly 28% YoY to $10.2 billion in the March quarter.


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