Apple stock dropped sharply after President Donald Trump said on Thursday that the U.S. will put an additional 10% tariff on $300 billion worth of goods imported from China starting on September 1.
Apple stock was down more than 2% at one point on Tuesday, erasing previous earlier gains. The Dow dropped more than 200 points on the Trump tweet. The S&P 500 was down less than 1% but had earlier gains wiped out.
The company assembles iPhones and other computers in China, making it vulnerable to price increases if a tariff were to be placed on Chinese exports, although it is unconfirmed which Apple products may be affected by the proposed tariff.
On June 17, Apple said in a letter to U.S. trade representative Robert Lighthizer that a fourth proposed tariff list which covers an additional $300 billion of imports from China would cover “all of Apple’s major products” and would would hurt its contribution to the U.S. economy. Apple can also apply for exemptions or exceptions for its products.
MacDailyNews Note: Apple CEO Tim Cook on China tariffs from the company’s July 30th conference call with analysts:
The way I view this is, the vast majority of our products are kind of made everywhere. There’s a significant level of content from the United States and a lot from Japan to Korea to China and the European Union also contributes a fair amount. And so, that’s the nature of a global supply chain. Largely, I think that will carry the day in the future as well. In terms of the exclusions, we’ve been making the Mac Pro in the U.S., we want to continue doing that. And so, we’re working and investing currently in capacity to do so, because we want to continue to be here. And so that’s what’s behind the exclusions. And so, we’re explaining that and hope for a positive outcome.