Apple’s stock price dropped sharply on Thursday after President Donald Trump said the U.S. would place an additional 10 percent tariff on roughly $300 billion of Chinese imports.
The “small additional” tariff on Chinese goods imported into the U.S. will kick in on Sept. 1, President Trump said in a tweet on Thursday.
In the wake of that, AAPL slid about 2.15 percent, mostly erasing any gains the stock saw after the company’s positive Q3 2019 earnings report.
How Could This Impact Apple?
Back in June, Apple sent a letter to U.S. Trade Representative Robert Lighthizer saying that the fourth proposed tariff list — likely the one President Trump tweeted about on Thursday — would cover “all of Apple’s major products.
That includes the iPhone, iPad, Mac, AirPods, Apple TV, Apple accessories, and the parts and batteries the Cupertino tech giant uses to repair its devices in the U.S.
“We urge the U.S. Government not to impose tariffs on these products,” Apple said in the letter.
The Cupertino tech giant also added that the tariffs would hurt Apple’s own contributions to the U.S. economy. While the company didn’t mention it, the tariffs could hypothetically result in price increases on Apple products, too.
It’s worth noting that Apple could apply for exemptions or exceptions from the tariff on some of its products. A similar letter sent to Lighthizer last fall likely contributed to Apple’s escape from the last round of tariffs.
Apple manufactures the current “trashcan”-shaped Mac Pro in Texas, although it didn’t have the smoothest start.
Moving the Supply Chain?
Tariffs placed on Chinese imports have caused a slew of American companies, Apple included, to look for other countries to build their products in.
According to The New York Times, Apple has “homed in” on Vietnam and India as potential alternatives to China. Apple’s supply chain partners, such as Foxconn, also said they are ready to move a portion of their production capacity to another country.