Donald Trump, the president-elect, has suggested significant tariffs on products from China, where a large portion of Apple’s products are produced. Despite this, Apple’s stock continues to reach new highs. Here’s the rationale behind it.
Apple’s International Competitors Acting as a Shield Against Potential Trump Tariffs
Deepwater Asset Management, led by Managing Partner Gene Munster, has released its predictions for the market heading into 2025.
Among these predictions, insights regarding Apple (alongside Tesla) reveal Wall Street’s perspective on the imminent tariffs from Trump and their projected effects on U.S. tech firms.
Deepwater anticipates:
Apple and Tesla are likely to receive exemptions from tariffs if Trump goes ahead with his proposed tariffs on China – it’s important to note that while many manufacturers will face increased tariffs, Apple and Tesla may escape these high costs, as Trump would prefer not to see Tesla lose ground to BYD or Apple to Samsung.
This aligns with the general expectations of various investors and analysts regarding the incoming Trump administration.
Even with the high probability of new tariffs being introduced, Apple seems poised to evade significant additional financial strains.
Insights from Trump’s First Administration Indicate What to Expect
Aspects of Trump’s initial term can provide valuable groundwork for anticipating Apple’s challenges over the next four years.
In 2019, then-President Trump had dinner with Apple CEO Tim Cook. According to Trump, Cook presented a persuasive case for tariff exemptions for Apple.
Cook reportedly highlighted that it would be difficult for Apple to absorb tariffs on its products assembled in China, especially since many of its competitors, like Samsung, don’t face the same level of tariffs given their manufacturing bases largely in South Korea.
This rationale underpins Deepwater’s belief that Apple will likely again secure exemptions from tariffs.
Though Trump clearly prefers Apple to relocate more production out of China, he also aims to protect a U.S. company contending with fierce international rivalry.
As Trump’s inauguration approaches, it is perhaps not surprising that Cook has recently dined with the incoming president again.
Do you believe new tariffs will affect Apple in any way? Share your thoughts in the comments section.
Top Apple Gifts for the Holiday Season
: We use income-earning automatic affiliate links. More.
