US President Donald Trump has announced new tariffs on imported goods, which will greatly affect Apple Inc due to its reliance on factories in China and other nations. These tariffs will reach 34% for China, threatening Apple’s supply chain.
While Apple makes most of its devices in China, the company has manufacturing centres in other countries. This includes Malaysia, where Mac computers are increasingly produced, and will be hit with a 24% tariff. Apple’s other production centres in India, Vietnam, Thailand, and Ireland, will also be affected by tariffs. The company does some manufacturing in its home country, but it is limited. The Mac Pro is produced in Texas, but its parts are imported from other countries.
The new tariffs, which are expected to be in effect starting 9 April, are more likely to affect the company’s profit margins. According to The Edge, Apple is unlikely to increase prices while consumer sentiment is shaky. Additionally, investors have also grown concerned about the new tariffs. Following the announcement, Apple’s shares went down by 7.9% in extended trading.
As most of Apple’s production is conducted outside the US, the company has attempted to get in the president’s good graces to avoid being hit by tariffs. Part of this includes the promise to invest US$500 billion (~RM2.2 trillion) in the US and the production of AI-related servers in Texas. However, it seems that the current US president remains unmoved, if not unfazed by this gesture.
The tariffs could also have more consequences for Apple as it sources components from other countries, which may also be affected by the new tariffs.
(Source: The Edge)
