Will The US-China Trade War Hit Apple The Most?
China’s decision to raise the tariffs on a number U.S goods (set to go effective June 1, 2019) after President Donald Trump threatened to raise the tariff on Chinese products came as a blow to the technology giant Apple, pulling down its stock by 6% as per reports in trading yesterday.
Many believe that the US trade war with China could disturb Apple’s business the most, primarily because the iPhone and many other of its electronic devices are assembled in Mainland China. China’s low-cost labor force and skill in manufacturing is the most cost-effective current option for Apple and moving out of the country would not only take time but would come with its share of possible execution risks.
Secondly, Apple’s customer base in China would be hit hard. China is Apple’s third biggest revenue generating market after America and Europe. Trade tensions between the two powers could hit the Chinese consumer sentiment and confidence leading to low sales on Apple products.
Apple CEO Tim Cook stated in an interview in January “It’s clear that the economy began to slow there for the second half and what I believe to be the case is the trade tensions between the United States and China put additional pressure on their economy,”
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