Trump’s new tariff test apple’s global supply chain

When President Trump first pushed the tariff forward on China in 2018, Apple began transferring more production of iPads and airpods to India for Vietnam and iPhones.

But with the return of Mr. Trump at the White House, this strategy may return to the world’s most valuable publicly trading company.

On Wednesday, Mr. Trump said that the United States would impose 46 percent tariffs on Vietnam and 26 percent on India. The White House has stated that tariffs are immediately effective, but some business experts consider them to be initial and designed as an early point for interaction to reduce foreign tariffs.

The proposed tariffs threaten to reduce the pressure on the apple business. The company is already dealing with 20 percent tariffs on products imported from China, where Apple makes about 90 percent of the iphones selling worldwide. Mr. Trump said that this rate will run up to 34 percent under his new tariff scheme.

A spokesman for Apple refused to comment.

While the most prominent technology company that feels the sting of Apple Tariff is the company, most other technical companies will directly or indirectly see an impact. For example, Google and Microsoft are not much dependent on international suppliers, but they have remarkable consumer electronics businesses. And tariffs can increase the cost of building new data centers on a large scale, companies are planning to create new artificial intelligence technology.

The new Levi is part of the efforts of Mr. Trump to remake world trade with tariffs in every country that charge US exports. American trade officials estimate India The tariff rate is 13.5 percent On American goods, 39 percent tariff on agricultural products. Vietnam has a tariff rate of 8.1 percent on US goods, with 17.1 percent tariff on agricultural products.

But during a news conference at the White House, Mr. Trump said that the combination of tariffs, currency manipulation and business obstacles had a much more significant impact.

The cost of “mutual tariff”, as Mr. Trump calls him, can put Apple’s business into a jam. Iphones, iPads and Apple see that the company sells that the annual revenue has a three-fourth of the $ 400 billion in the annual revenue. Saying with Mr. Trump that he would not allow products to be allowed to exempt from tariffs, Apple will either have to pay fees that will reduce their profit, or indirectly pass the extra costs by raising prices to customers.

According to Morgan Stanley, without any relief from the Trump administration, the annual cost of Apple from tariffs imported from China and other equipment imported from China will increase by $ 8.5 billion. This will reduce the company’s profit next year by $ 0.52 per share, or by about 7.85 billion dollars. This will be about 7 percent hits on next year’s profits.

After Mr. Trump’s comments, Apple’s stock fell 5.7 percent in aftermarket trading.

“Apple will take these new tariff numbers and put them in models that they have created and they know how big the problem they have,” said Annas-Katina Shedletski, founder of a bay area company, instrumental, said artificial intelligence to improve manufacturing performance. She used to work in Apple earlier.

After holding the office of Mr. Trump, Apple’s CEO Tim Cook went to the White House and promised that Apple would invest hundreds of billions of dollars in the United States. In February, Apple promised to invest $ 500 billion in the country and followed the promise after the promise, most of which is already part of their spending plans.

During the previous Trump administration, Mr. Cook’s work helped Apple to avoid tariffs on most of his products to make a relationship with Mr. Trump. In the previous Trump administration, US trade officials did not impose tariffs on iPhones, and they removed the tariff from Apple Watch.

In 2019, Mr. Trump visited an apple plant in Texas which created a desktop computer. Mr. Cook was standing next to Shri Trump as the President had taken credit for the plant, which had been making computers since 2013.

Since then, Apple has not produced a single major product in the United States. Instead, it adopted an attempt to diversify beyond China.

In 2017, as Sri Trump started in the office, Apple started assembly lines for iPhones in India. It took five years to train workers and build infrastructure to create their latest iPhones in the country. It is in the process of increasing production there, it is expected that the country’s factories manufacture about 25 percent of 200 million iPhones that sell it annually.

The company also started transferring the production of Airpods, iPad and MacBook to Vietnam. In 2020, Covid-19 in China, after closing factories, became a destination for the country Apple and others, and Vietnam factories calculated more than 10 percent of the top 200 suppliers that the company was in 2023.

Vietnam was an attractive place due to proximity to China. India was attractive because Apple wanted to promote the sales of iPhones in the country, which is the second largest smartphone market in the world.

But Apple has struggled with American production in the past. The Texas plant that built Mac had a problem as some workers had gone from the job after their innings, but the company was forced to close the assembly line before their replacement. It also struggles to find suppliers that can create essential components like a custom screw.

Mr. Cook has said that the United States does not have enough efficient manufacturing workers to compete with China. But Conference at the end of 2017He said that China was one of the few places where Apple can find firmly to those who are capable of running state -of -the -art machines that make its products.

“In the US, you can hold a meeting of tooling engineers, and I am not sure we can fill the room,” said Mr. Cook. “In China, you can fill many football grounds.”