that it decided to raise tariffs on some U.S. goods after President Donald Trump threatened to further raise tariffs on Chinese imports last week.
The trade war is affecting a lot of different stocks, but Apple seems to be hit harder than most. The Dow Jones Industrial index dropped 2.6%, and the Nasdaq Composite dropped 3.5%.First, it assembles its iPhones primarily in China. Although it has a lot of American suppliers — it spentWhenever new tariffs are announced, investors must keep an eye on the details because it's possible that some of Apple's products could get caught in the crossfire.
Morgan Stanley analyst Katy Huberty estimates that a 25% tariff on the iPhone could lead to a price increase of $160 for the iPhone XS. Or Apple could eat the tax, which could lead to a 23% decrease in earnings per share in 2020. "Apple has one of the most significant exposures to Chinese exports to the US in our IT Hardware coverage group, given final assembly for many of its consumer electronic devices is located in China," Huberty wrote in a note last week.
"And given the reliance on China's established, low-cost labor force and expertise in manufacturing/tooling, a large-scale move out of the country would not only be costly, but could take multiple years to complete, potentially raising the odds of execution risk, in our view," the note continued.
ChinesseSlaveLabor
What would be the impact on the $AAPL stocks if China decided to shut down the Apple factories? Huawei will survive with no U.S. What is the true bill for Apple to pay due to the tariffs war? We will find out soon. Apple should be already shifting its factories to Vietnam.
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