This archive report was first published on 5 August 2019.
On August 1, 2019, President Donald Trump announced plans to impose a 10% tariff on $300 billion in Chinese goods, starting September 1, 2019. This move could have far-reaching consequences for Apple, particularly in the electronics sector.
While the U.S. Trade Representative has not released the finalized list of affected products, it's possible that the list was revised to remove certain items following public hearings last month. President Trump's decision to impose this tariff could spell disaster for Apple, with analysts predicting a potential 4% negative impact on earnings per share in the fiscal year 2020.
Wedbush Securities analysts Daniel Ive and Strecker Backe warned that the tariff could cripple iPhone demand by 6 to 8 million units over the next 12 months, based on their analysis of Apple's overall unit forecast for the fiscal year 2020. The analysts also noted that Apple can apply for exemptions from the import duties, but it remains to be seen whether the company will be able to secure these exemptions.
President Trump's decision to impose the tariff comes as the two countries continue to negotiate a trade deal. Earlier in the week, a US delegation met with Chinese trade officials for the first time since the countries reached a truce at the June G-20 Summit. On top of the tariff, President Trump also announced plans to reverse the ban on sales between Huawei and United States companies.
As the situation continues to unfold, it's clear that President Trump's decision to impose the tariff has significant implications for Apple and the tech industry as a whole. The company's ability to navigate this complex and rapidly changing landscape will be crucial in determining its future success.
