“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
Do you think the US & China should have equal & fair rules for cars? Meaning, same import duties, ownership constraints & other factors.
— Elon Musk (@elonmusk) March 8, 2018
SEE ALSO:
Apple CEO Tim Cook heads to China as President Trump orders 25 percent tariffs on up to $60 billion in Chinese imports – March 23, 2018
BoA Merrill Lynch: Apple is prepping a ‘foldable’ iPhone; U.S. and China trade tensions not an issue for Apple – March 23, 2018
Designed in California. Assembled in China. How Apple’s iPhone skews U.S. trade deficit – March 21, 2018
President Trump blocks Broadcom-Qualcomm deal over China concerns – March 13, 2018
Elon Musk sides with President Trump on trade with China – March 8, 2018
Analyst: President Trump’s tariff impact on Apple would be just a ’rounding error’ – March 7, 2018
Apple and other tech firms caught in crossfire as U.S.-China trade war looms – March 7, 2018
Apple Macs caught up in President Trump’s aluminum tariff plan – March 2, 2018