Background and Causes
Apple has lost its title of the most valuable company on the stock market as investors fear the impact of the China tariffs imposed by President Donald Trump on the iPhone giant. These tariffs have led to a significant drop in Apple’s stock price, allowing Microsoft to take the lead with a market value of approximately 2.64 trillion dollars.
- China Tariffs: The Trump administration has imposed extensive import tariffs on products from China. Total duties of 104 percent are due on imports from China to the U.S. This particularly affects Apple, as most iPhones are produced in China.
- Production Relocation: In response, Apple plans to deliver iPhones from India to the U.S. while also attempting to obtain an exemption from the tariffs. However, there is also a 27 percent tariff on goods from India.
Effects and Forecasts
- Stock Plunge: Apple’s stock has lost more than a fifth of its value in just a few days, translating to a total loss of about 500 billion dollars in market value.
- Price Increases: Analysts warn of possible price increases for iPhones in the U.S. The price of the upcoming iPhone 16 Pro Max could rise by up to 350 dollars.
- Production in the U.S.: The White House suggests that Apple should relocate its production to America. However, experts caution that this would significantly raise the cost of an iPhone and require massive investments.
Market Reaction
The entire technology sector is under pressure due to these developments. The Nasdaq Composite has significantly dropped within a few days. Microsoft, on the other hand, appears more resilient and has regained its status as the most valuable company on the stock market.
Overall, these developments present a significant challenge to Apple’s business model and could have long-term implications for the company.