U.S. President Donald Trump suggested that a 10% tariff might be imposed on iPhones and laptops made in China.
Referring to a potential tariff on the items, President Donald Trump said in an interview with The Wall Street Journal, “Maybe. Maybe. Depends on what the rate is,” while adding, “I mean, I can make it 10%, and people could stand that very easily.” However, some analysts are already predicting possibilities of a severe blow to Apple if a tariff is implemented.
Investment bank Baird projects at least 10% adverse impact on consumer demand in the U.S., if a 10% tariff is slapped on imported iPhones. Baird estimates that every 5% reduction in U.S. product revenue hurts Apple’s earnings per share by roughly $0.25-0.30 (accounting for demand elasticity effect). A tariff could potentially discourage consumers from buying the products, especially since several iPhone models are already priced at $1,000 or above.