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Apple Holds Out Hope That China Will Spare It

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Jun. 17 2019, Updated 9:39 p.m. ET

Investors fear China will retaliate with a ban on Apple products

Apple (AAPL) is holding out hope that China will target it as its trade war with the US escalates. Last month, the US blacklisted Huawei, leading US suppliers to give the Chinese technology star a wide berth. Google has reduced its business dealings with Huawei, while Microsoft (MSFT) has stopped selling Huawei laptops in its digital shop.

US semiconductor companies Intel (INTC), Qualcomm (QCOM), and Broadcom (AVGO) have also reportedly stopped selling their chips to Huawei to avoid troubles with US regulators that have labeled the Chinese company a national security risk.

There have been concerns that China may target US companies to revenge the damage that the US is causing it by imposing tariffs on its products and by prohibiting Huawei from selling its 5G equipment in the US and buying parts from US companies.

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Apple CEO believes China doesn’t want to destroy the company

But Apple CEO Tim Cook said in a TV interview recently that China hasn’t targeted Apple in the trade war, and he doesn’t see that happening. Some on Wall Street have estimated that Apple’s global profit will fall by as much as one-third if China retaliates in the trade dispute with the US by banning the sale of Apple products in the country. Apple’s profit fell to $11.6 billion in the March quarter from $13.8 billion a year ago. Weakness in Apple’s China business was partly to blame for the slump.

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