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Apple escapes tariffs – How Trump averted the iPhone risk!
US tariffs on Chinese products weigh on Apple: insights into production relocations, market strategies and current challenges.
Apple escapes tariffs – How Trump averted the iPhone risk!
Apple has faced potential economic turmoil in recent weeks caused by U.S. tariffs on Chinese products. These tariffs would have hit the company hard World reported. In a crucial twist, President Trump granted exemptions for a wide range of consumer electronics products, including iPhones, iPads, Macs, Apple Watches and AirTags. This exception also includes the ten percent basic tariffs on almost all imported goods.
A new sectoral tariff on goods involving semiconductors has been announced, while the basic 20 percent tariff on goods from China remains in place. Analyst Amit Daryanani predicts Apple shares will rebound after an 11 percent decline this month. Apple had originally planned to increase production of iPhones in India to avoid the tariffs, but that would have posed major challenges ahead of the iPhone 17 launch.
Production challenges and market shares
According to current estimates, 87 percent of iPhones are manufactured in China, as are 80 percent of iPads and 60 percent of Macs. These products represent approximately 75 percent of Apple's annual sales. Almost all Apple Watches and AirPods are produced in Vietnam, while some iPads and Macs are also manufactured there. A complete separation from China as a production location is considered unlikely, and lobbyists for Apple and other technology companies have asked the White House for an exemption. Pressure on the US government increased as the tariff conflict with China escalated.
Furthermore reported South China Morning Post that Apple's supply chain disruptions and cost control measures are having a negative impact on Chinese suppliers and distributors. The financial situation of several Chinese suppliers has reportedly worsened, with companies heavily dependent on Apple particularly affected. Lens Technology, for example, reported a 35 percent decline in net profit compared to the previous year, while other suppliers also suffered significant financial losses.
Rising raw material prices and the supply chain crisis have led Apple to further compress its suppliers' profit margins to save costs. According to Lin Zhi, principal analyst at Wit Display, these changes have increased cost burdens for suppliers.