Apple shares took a steep dive in after-hours trading on Wednesday following the United States’ announcement of aggressive new tariffs. The U.S. introduced a 34% levy on Chinese imports, a move expected to disrupt Apple’s supply chain significantly. This is part of President Donald Trump’s sweeping trade policy overhaul, pushing the total tariff on Chinese goods to 54%. As a tech giant still reliant on Chinese manufacturing, Apple now confronts rising costs across its global production network.
The White House confirmed the tariffs, including a universal 10% baseline, will start on April 9. These measures also impact other key Apple production hubs in Asia, challenging the company’s efforts to diversify beyond China. The news triggered a sharp reaction, with Apple shares dropping as much as 7.9% in post-market trading. This adds to an 11% year-to-date decline amid mounting tech sector pressure.
Profit Margins Under Threat
Analysts from Bloomberg Intelligence, Anurag Rana and Andrew Girard, warned of squeezed profit margins for Apple. They noted the company is unlikely to pass these costs to consumers in a fragile market. “If Apple raised prices, it would hit shaky consumer sentiment,” they wrote in a recent note. Apple has yet to comment on the development.
Efforts to Win Favor in Washington
To maintain goodwill with the U.S. government, Apple pledged a $500 billion investment in the U.S. over four years. This includes AI-related manufacturing in Texas and chip production in Arizona. However, mass production in the U.S. remains limited. The Mac Pro, built in Texas, accounts for only a small share of sales.
During Trump’s first term, Apple CEO Tim Cook secured tariff exemptions. He argued that tariffs would harm an American company while boosting rivals like South Korea’s Samsung. This time, those efforts seem to have failed, leaving Apple vulnerable in Trump’s tariff reset.
Shifting Production and Global Impact
Apple has started moving some production to India and Vietnam. Yet, most core devices, including iPhones, are still assembled in China. The new trade actions spark fears of a global trade war. With levies targeting Asia and beyond, supply chain disruptions and higher consumer prices could soon affect international markets.
