Apple devices set to become pricier as NYT analyzes impact of Trump's new tariffs
Photo: NYT assessed whether Apple's technology could become more expensive due to Trump's new tariffs (Getty Images)
The administration of US President Donald Trump is introducing new tariffs, which could particularly impact the business of Apple, The New York Times reports.
"The proposed tariffs threaten to compound the pressure on Apple's business. The company is already dealing with 20 percent tariffs on products imported from China, where Apple makes about 90 percent of the iPhones it sells around the world," the media informs.
The issue is that when Trump first imposed tariffs on Chinese goods in 2018, Apple began moving its iPad and AirPods production to Vietnam, and iPhone production to India.
Two options for Apple
As clarified by the journalists, a representative from Apple declined to comment. However, the article's authors suggest that the tariff costs "could put Apple's business in a jam."
"The iPhones, iPads, and Apple Watches that the company sells deliver three-quarters of its nearly $400 billion in annual revenue. With Mr. Trump saying he won't allow products to be exempted from tariffs, Apple will have to either pay those fees, which will reduce its profit, or indirectly pass those added costs on to customers by raising prices," the media resource emphasizes.
In addition, the article provides the following statistics: According to Morgan Stanley, tariffs on iPhones and other devices imported from China will increase Apple's annual expenses by $8.5 billion without any relief from the Trump administration.
"That would reduce the company's profit next year by $0.52 per share, or about $7.85 billion. That would be a roughly 7 percent hit on next year's profits," writes The New York Times.
Apple's stock drop
Apple's stock fell 5.7% in aftermarket trading following Trump's statements.
"Apple will take these new tariff numbers and put them in models they have built and know within hours how big of a problem they have," said Anna-Katrina Shedletsky, the founder of Instrumental, a Bay Area company, who previously worked at Apple.
Problems may not be limited to Apple
Most other tech companies are also likely to feel the impact - directly or indirectly.
"Google and Microsoft, for example, are not as heavily dependent on international suppliers, but they do have notable consumer electronics businesses," notes The New York Times.
Tariffs may also increase the cost of building huge new data centers that companies plan to construct for developing new artificial intelligence technologies.
Trump's new tariffs
Earlier, US President Donald Trump announced the introduction of large-scale tariffs on American imports from April 3. These tariffs are expected to affect trade volumes worth trillions of dollars.
The announced tariffs range from 10% to 49% on imported goods. In particular, the US is implementing a separate tariff of 10% on imports from Ukraine. This is the lowest basic tariff rate for countries subjected to such tariffs.
For more details on Trump’s new tariffs, read our article on the topic.
