Apple Inc (Nasdaq: AAPL) investors got more bad news this week after the Wall Street Journal reported President Donald Trump is prepared to expand U.S. tariffs on Chinese goods to potentially impact iPhone imports.
Fears over a possible 10 percent import tax on iPhones pushed Apple stock lower Tuesday, and analysts say the stock could face further selling pressure this week ahead of the G20 summit in Buenos Aires.
Up to this point, iPhones have been exempt from Trump’s 10 percent trade war tariffs on $200 billion worth of imported Chinese goods. However, just four days before a meeting with Chinese President Xi Jinping at the G20, Trump said that he is open to the possibility of expanding U.S. tariffs to an additional $267 billion worth of goods if a trade deal is not reached. Those goods could include imported iPhones and laptops.
“Depends on what the rate is,” Trump said when asked about an iPhone tariff. “I mean, I can make it 10 percent, and people could stand that very easily.”
Trump also said he still plans to raise the rate of existing tariffs on China from 10 percent to 25 percent starting on Jan. 1.
AAPL shares are down 20.1 percent in the past month following a disappointing third-quarter earnings report and growing trade war concerns. If early Tuesday trading prices hold, Microsoft Corp. (MSFT) could take over Apple’s spot as the most valuable U.S. public company.
Unfortunately for Apple investors, Wedbush Securities analyst Daniel Ives says there will likely be no relief for AAPL stock in the days leading up to Trump’s meeting with Xi.
“The Street will not be taking this news lightly as with the litany of bad news Apple have seen over the last month from the Cook iPhone metrics pull, softer data points out of Asia around XS/XR initial demand and now this tariff threat on iPhones out of left field from Trump,” Ives says. “The long-term Apple iPhone story with $50 billion of services remains the key for long-term investors, although in the near term this string of bad news continues to add to the dark clouds over Cupertino’s head and thus will weigh on shares.”
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