The introduction of hefty tariffs by the Trump administration has unleashed a firestorm like no other, with Apple being one of the many companies that had to endure a massive blow on Thursday because of the latest announcement. The company suffered a mammoth $250 billion hit in market capitalization, with its shares down by as much as 8.5 percent. Other technology firms have also witnessed their shares drop, as we dive into the details below.
Multiple analysts believe that Apple must increase the prices of its products, including iPhones, to offset the deleterious effects of the tariffs
The new levies will go into effect from April 5, which only means that Apple and other companies will enter ‘panic mode’ and attempt to address the situation using various measures. As reported by Techcrunch, the California-based giant took one of the biggest hits compared to others, with Tesla, NVIDIA, and Meta down by 6 percent and Amazon down by 7.2 percent.
With China’s tariff rate reaching an astronomical 54 percent and Vietnam's touching 46 percent, Apple should brace itself to absorb the incoming costs and pass the savings to customers or force the same customers to pay the extra premium. In any case, the company will take a hit, with TF International Securities analyst Ming-Chi Kuo commenting that if the iPhone maker refrains from increasing the prices of its products, it would have to bear between an 8.5-9 percent hit to its gross annual revenue.
Kuo has mentioned some steps that Apple can take to curb its losses, starting with increasing iPhone production in India, but that only becomes a viable option if tariff exemptions happen in this region. Alternatively, the Cupertino firm can increase the prices of its ‘Pro’ iPhone models, suggesting that the upcoming iPhone 17 Pro and iPhone 17 Pro Max will be significantly more expensive for U.S. consumers.
Apple has not commented on the recent developments, but we expect CEO Tim Cook to hold a meeting with President Trump in the coming days to see if he can lift the tariffs on some regions where it has set up its supply chain or, at the very least, reduce the levies. We sincerely doubt that the Trump administration will lose its grip on China, but we could be convinced to take a step back for other countries.
News Source: Techcrunch
