Apple is facing big challenges as its stock continues to drop due to President Donald Trump’s tariffs. Over the past three trading days, Apple’s shares have fallen by 19%, erasing $638 billion in market capitalization. Concerns are growing about the company’s reliance on China for manufacturing, as imports from the country are now subject to a 54% tariff.
Although Apple has production facilities in India, Vietnam, and Thailand, these countries are also affected by increased tariffs ranging from 26% to 46%, limiting options for relief. Analysts say Apple may need to raise prices or absorb the additional costs when the new duties take effect. UBS analysts estimate that the price of Apple’s highest-end iPhone could rise by $350, or around 30%, from its current price of $1,199. If Apple chooses not to increase prices, it could face a 15% cut in earnings per share.
Apple has taken steps to reduce the impact of tariffs. The company is adding production capacity in India to meet about half of U.S. demand for iPhones from Indian factories. It has also shipped large volumes of inventory from India and China to the U.S. ahead of the tariff deadline, temporarily protecting itself from price hikes. Additionally, Apple is reportedly seeking tariff exemptions similar to those granted during Trump’s first term.
Despite these efforts, analysts say Apple’s challenges are far from over. The company must deal with geopolitical tensions and rising costs in alternative production hubs. There is also concern about possible retaliation from foreign markets that could affect its services segment and global revenue. Apple declined to comment on the tariffs.
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