Apple is once again caught in the crossfire. Pres. Trump announces a 10% tariff on all products imported from China.
This wasn’t the first time that the Cupertino was caught between two warring countries. During Trump’s first stint as president, he imposed the same tariff he’s imposing now. Apple was able to weather the storm by bearing the added fees at no cost to the consumer.
The question now is, can Apple continue to bear the added cost of importation, or will they pass it to the consumer?
Apple’s Financial Dilemma
iPhones are currently Apple’s bread and butter, meaning most of their revenue comes from this stream. 85% of iPhones sold were manufactured in China, with 62% of Apple’s overall revenue coming from devices made in China. Apple is at a crossroads as Gene Munster, managing partner for Deepwater Asset Management, predicts both options will take a hit on the company’s profits.
Apple’s Long-Term Strategy
The tech giant is already exploring options to lessen dependence on China’s manufacturing prowess. Analysts predict a shift to India for half of its manufacturing by 2027. But, for now, Apple may be hoping for Trump’s power to exempt products from the tariffs, sparing U.S. consumers the added burden.
Impact on the Philippines
If Apple changes its worldwide pricing to make up for income losses from the tariffs, Filipino customers might have to pay more for iPhones. Furthermore, a stronger US currency brought on by market turbulence may increase the cost of imported digital items, such as iPhones, for Filipinos. These elements may put additional pressure on consumers’ purchasing power and limit the availability of Apple products in the nation.