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A hot potato: Global financial markets posted three consecutive days of losses as the trade war between the U.S. and the rest of the world escalated. The tech sector has been hit particularly hard by President Trump’s tariffs, with all major U.S. tech companies losing a significant portion of their market value. Apple has seen the hardest hit, shedding nearly 20 percent of its market cap in one of the steepest declines in the company’s history before a mild recovery on Tuesday.
While most major American tech companies have much to lose in a global trade war, Apple – the world’s largest by market cap – is the most vulnerable of the so-called “Magnificent Seven” due to its heavy reliance on China. Most of Apple’s products, including its best-selling iPhone models, are manufactured in the communist nation, meaning the proposed 50 percent tariffs would affect it more severely than most.
Related: Consumers race to Apple stores as tariff fears spark iPhone rush
Apple also has manufacturing partners in Vietnam, Thailand, and India, but those countries are facing increased tariffs under Trump’s new plan as well. Since Apple does not currently manufacture any of its products in the U.S., analysts believe that if the proposed tariffs are enacted, the company will either have to absorb the additional costs or raise prices – potentially reducing its profit margins or losing market share.
According to UBS analysts, the tariffs could increase the price of the flagship iPhone 16 Pro Max by as much as $350 if Apple chooses to pass the cost on to consumers.
Despite the downturn, tech stocks staged a mild rebound on Tuesday. Hopes that President Trump might delay or soften the proposed tariffs helped lift investor sentiment. Out of the big tech “Magnificent Seven” Nvidia led the recovery with a gain of about 4%, while Meta, Tesla, Amazon, Apple, Microsoft, and Alphabet rose around 1-3%.
Source: Companies by Marketcap
However, the broader picture remains shaky, underscoring ongoing concerns about the impact of a prolonged trade war. Last Thursday, rumors of a potential tariff delay triggered a volatile trading session, but not before the “Magnificent Seven” lost a staggering $1.8 trillion in market value in mere days. Apple’s stock plummeted nearly 20 percent over the past three sessions, wiping out nearly $640 billion in market cap. The stock is up three percent in early Tuesday trading, but still down more than 16 percent over the last five days.
Meanwhile, Brazilian media is speculating that Apple could shift iPhone production to Brazil to avoid the proposed tariffs on China. While Apple has not commented on these rumors, Brazil currently faces only a 10 percent tariff under the Trump administration’s new plan – far less than India, which would be subject to a 26 percent tariff.
Apple has been assembling products in Brazil in partnership with Foxconn since 2011. However, these facilities primarily serve the local market with entry-level models.
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