“Eager to fix what is perceived as unfair trade practices from China, the Trump administration said it would impose a 25% tariff on more than 1,300 imported goods Chinese goods, totaling $50 billion worth of Chinese products that will feel the effect of the new tariffs annually,” Richard Saintvilus writes for Nasdaq. “As President Trump works to make good on his campaign promise to forge a better trade deals, investors grapple with the potential adverse effects retaliatory tariffs can have on corporate bottom lines, particularly from companies that derive sizable positions of their sales from the world’s most populous country.”

“Apple, which has made China its second-largest market, is high on the list of companies with the most at stake. Out of the $229 billion in sales reported for fiscal 2017, about $45 billion, or roughly 20% came from China, according to financial researcher FactSet,” Saintvilus writes. “That $45 billion figure ranks the highest among all S&P 500 companies.”

“However, from a percentage perspective, the story changes. That 20% of Apple’s sales comes from China is not that significant,” Saintvilus writes. While a trade war, assuming one ensues, could result in higher manufacturing costs for Apple, and thus eat at its profit margins, the impact would be minimal, according to Gene Munster, analyst at Loup Ventures. And that’s because the bulk of Apple’s products are manufactured outside of the United States. What’s more, the tariffs — as it stands — would impact raw materials like aluminum and steel, meaning Apple would see little impact to its products, if any.””

Read more in the full article here.

MacDailyNews Take:

A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. — Warren Buffett

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