Apple falls after Trump suggests iPhones could get hit by tariff

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Apple is facing some serious concerns on their growth in the tech market. Apple surrendered their crown as the world’s most valuable publicly traded company on Monday to the Microsoft Corp. The Apple company shares falls about a fifth of their value in a tech market. Its shares were 1.5 percent down at the value of $172.02 in New York Tuesday morning. New iPhone models launched in September 2018 are not selling as good as expected by the company.

Another issue Apple Inc. has to face is the imposition of 10% tariff on Chinese imports.

In an interview to the Wall Street Journal American President Donald trump said that he may include Apple’s signature products in another round of tariffs on Chinese imports. He further added that, I can make it 10 percent and people could stand that very easily.

In the mainstream, most of the iPhones and other apple products are built in china. Apple Inc. imports their supply from China and then exported their products globally. United States import duties from China increases from 10 percent to 25 percent of about $200 billion to be paid on January 1. That is the main reason that American president suggests the imposition of 10 percent tariff on Apple products.

Apple share falls
Apple

Though apparently, as said by the president itself that 10 percent in not going to cause much burden on the buyers and sellers. But according to the analyst this statement by the American president may shake investors. We all are very well aware of the fact consumer price sensitivity. The average sale price of an iPhone (new models) is about $800 and the addition of tariff tax on this product will create some strong downward effects to the demand drive. According to the RBC analyst Amit Daryananai company’s earnings dropped down and on the stock RBC also lowered its price target from $240 to $ 235.

The biggest iPhone assembler company Hon Hai Precision Industry Co. shares fell less than 1 percent in Taiwan trading on Tuesday and this year dropped about 40 percent. Another supplier named Inventer corp. dropped about 4 percent at the lowest level in more than a year.

Many times American President Donald Trump proposed that the company Apple should bring its manufacturing to the U.S.  Recently Cook said in an interview that it is not true that the iPhones are not made in the United States. Some of its parts like smartphones glass cover are manufactured in the U.S. and then shipped to China for assembling.  In recent years company has made some of its manufacturing (older iPhones) in India and Brazil to avoid local taxes on imported goods.

It is also stated that the U.S. would not impose taxes on the products like apple watch and AirPods but still other items like Apple pencil Stylus, Man Mini, some cables and cases could be harmed.

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