“It’s unlikely a Trump tariff would ultimately succeed in bringing back US manufacturing jobs. It’s more likely that those jobs would simply move from China to regions such as Southeast Asia and India that are not under the Trump tariff. Fortunately, Trump has not explicitly threatened to withdraw from the General Agreement on Tariffs and Trade (GATT) that has been the fundamental regulatory mechanism for free trade, or from the World Trade Organization which administers GATT,” Hibben writes. “I consider this a hopeful sign that Trump will stop short of igniting an all-out trade war with China.”
“I think it’s likely that the Republican establishment will try to moderate Trump’s views, seeing the potential damage that a large tariff could do. But a tariff of some form is probably on its way,” Hibben writes. “So, there is some near-term downside for Apple due to a Trump tariff, which may cause some downward pressure on the stock. This is largely offset by the prospect of a huge repatriation windfall for investors. If Apple only gives half of its offshore cash (after taxes) to investors as a one-time dividend, it would still amount to about $18/share. This would make the lackluster YTD stock price gain of about 6% much easier to bear.”
Read more in the full article here.
MacDailyNews Take: There are currently too many variables regarding the trade issues to gauge the impact on Apple, but the tax issue is more straightforward and obviously a tremendous benefit to Apple and, in fact, all U.S. companies, their employees, and their shareholders.
Even with limited visibility, we don’t foresee any “trade wars” that would be so extreme as to negatively impact U.S. employment/job creation which seems to be a top priority of the incoming administration.