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Trump tariffs impact supply chains Apple developed to reduce its China dependency
- Apple has diversified its manufacturing from China by selling iPhones made in India, AirPods from Vietnam, and Mac desktops from Malaysia.
- However, Trump's 'reciprocal tariffs' have impacted these countries, causing Apple's shares to decline by over 9% on Thursday.
- To offset the tariffs, Apple may need to raise prices by 17% to 18% in the U.S., potentially affecting its business.
- The company's official suppliers are heavily located in countries affected by the tariffs, including India, Japan, South Korea, Taiwan, Vietnam, and Malaysia.
- Trump aims to bring manufacturing back to the U.S., which could impact Apple's operations since most manufacturing is done in countries with tariffs increased.
- Apple's long-standing resistance to manufacturing in the U.S. due to costs and disruption may continue despite Trump's push for bringing production back.
- Analysts predict possible negative impacts on Apple's earnings and margins due to the tariffs, with uncertainty about how the company will handle the situation.
- There are concerns about how Apple will balance potential price increases for its products versus absorbing the extra costs incurred from the tariffs.
- The situation could have a significant impact on Apple's fundamentals, leading to downside risks in terms of margin and earnings expectations.
- Investors are eager to see how Trump's tariffs will affect Apple's financial performance going forward, especially amid ongoing uncertainties in global trade relations.
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