UBS: Apple could ‘ultimately mitigate’ President Trump’s proposed tariffs on iPhones, laptops

“New tariffs on consumer products like the iPhone wouldn’t hurt Apple too much, UBS says,” Ethel Jiang reports for Business Insider. “Fears over such tariffs were highlighted Monday when President Donald Trump told The Wall Street Journal that he was prepared to slap tariffs on the rest of Chinese goods not already subject to duties, including some consumer goods such as iPhones and iPads. He also told The Journal it was ‘highly unlikely’ that the US would exit this week’s G20 summit with an agreement to hold off on increasing duties already in place on Chinese goods.”

“The UBS analyst Timothy Arcuri said those threats could simply be a ‘negotiating tactic’ ahead of the G20 summit, when Trump is expected to meet with Chinese President Xi Jinping,” Jiang reports. “He also said that ‘Apple could ultimately mitigate any tariff impacts’ if Trump goes ahead with the plan.”

It is unclear whether the incremental tariffs would be at 10% or 25%, but assuming a 10% rate, we estimate an earnings per share impact of ~$0.33 (~2.5%) on our baseline F2019E EPS of $13.06 assuming implementation in March quarter and assuming Apple would absorb the incremental costs rather than passing them on to consumers. — UBS analyst Timothy Arcuri

Read more in the full article here.

MacDailyNews Take: We’ll see how it shakes out, but we wrote back in August:

The tariffs are not the end game. They are bargaining chips and, due to the trade imbalance, the U.S. has 376 billion more chips with which to play than China ($506B – $130B)… This initial negotiation phase too shall pass. The end result will be better than the starting point.

I’m cognizant that in both the U.S. and China, there have been cases where everyone hasn’t benefited, where the benefit hasn’t been balanced. My belief is that one plus one equals three. The pie gets larger, working together. — Apple CEO Tim Cook, March 24, 2018

At least half of the popular fallacies about economics come from assuming that economic activity is a zero-sum game, in which what is gained by someone is lost by someone else. But transactions would not continue unless both sides gained, whether in international trade, employment, or renting an apartment. — Thomas Sowell, June 14, 2006

Apple rout worsens after President Trump suggests the U.S. could place a 10% tariff on iPhones and laptops made in China – November 27, 2018
Trump administration to spare some Apple products including Apple Watch, AirPods, and HomePod from latest China tariffs – September 17, 2018
China’s stock markets down as President Trump said to ready new tariffs – September 17, 2018
Cramer: Here’s why China won’t boycott Apple as part of its trade war with the US – August 7, 2018
Apple could be used as a ‘bargaining chip’ in the trade war, Chinese state-run media warns – August 7, 2018
Why the US-China trade war may not have much impact on Apple – July 17, 2018
Apple launches $300 million China Clean Energy Fund – July 13, 2018
What trade war? Markets shrug off US-China dueling tariffs – July 6, 2018
U.S. President Trump puts tech in trade war crosshairs with planned curb on China investment – June 25, 2018
The Trump administration told Apple it would not place tariffs on iPhones assembled in China – June 19, 2018
Chinese stocks end at 2-year low, Apple suppliers sink on trade-war concerns – June 19, 2018
Why Apple CEO Tim Cook is acting like tech’s top diplomat – June 18, 2018
Apple CEO Tim Cook doesn’t expect a full-blown trade war between the U.S. and China – June 5, 2018
President Trump and Apple CEO Cook meet at White House with trade the focus – April 25, 2018
Apple CEO Cook to meet with President Trump – April 25, 2018
Why Apple stock can withstand a Chinese trade war – April 5, 2018
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


  1. Wow a lot of articles on possible tariffs. Well good nothing like a bit of redundant repetition, just like the tides, except for those who can’t stand the message.

    So let’s repeat again since we all like to repeat on this site, that trade wars are easy to win, according to the head of a nation that just can’t help their genocidal tendencies while looking for some sort of weapons of mass destruction in Iraq. They’ve repeated it parrot like for so long it’s not surprising that they are devolving into a the bird brain nation.

    1. “while looking for some sort of weapons of mass destruction in Iraq.”…

      “while looking for some sort of weapons of mass destruction in Iraq.”…

      “while looking for some sort of weapons of mass destruction in Iraq.”…

      The “bird brain” is much smarter than an obsessive DISORDER broken record…

  2. No part of the economy is frivolous as there are always people depending on a level of stability to whatever it is they do. My biggest concern isn’t really about a company like Apple with billions upon billions in the bank. The ag sector that is a linchpin of where I live is wildly uncertain right now and temporary dents to the tech sector, for me anyway, is secondary to much more permanent damage to a part of the economy that both produces are food and keeps the cost of it reasonable. Playing political and economic “chicken” with that is unsettling and many producers don’t have the kind of capital reserves to survive long enough to reap whatever benefits may occur down the road.

  3. Again, welcome to MDN (Magnificent Donald News) where no matter how irrational, idiotic, counterproductive, I’ll-conceived, etc Mr. Trump’s actions are, this website’s authors refrain from criticizing “his majesty”.

    1. Yes, these losses are directly attributed to the tariffs but we need to look at why. Ford purchases around 98% of the steel it used from American steel companies so why would the tariffs on Chinese steel effect Ford?

      American steel companies can now charge what they used to before the flood of cheap Chinese steel that was putting American steel factories out of business. Yes, Ford is paying 1 billion more for steel but they are paying the priced they used to pay.

    2. The tariffs are bargaining chips meant to achieve some semblance of balance where there currently is none. The tariffs are not permanent nor are they guaranteed, as the estimates you’ve quoted above assume.

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