Wall Street gripped by fear that Donald Trump’s China tariff escalation will disrupt Apple’s tech supply chain
- Even China bulls are shunning the firm, fearful that new tariffs could damage the tech ecosystem and deliver a ‘gut punch’ to the industry, an analyst says
- Recent White House actions indicate the US president is inclined to follow through with further punitive duties
Investors in Apple's iPhone and its supply chain are taking no chances when it comes to the next stage of the US-China trade war.
Even long-time China bulls such as large investor Thornburg Investment Management are bailing out of Apple and the companies in its supply chain, worrying that new rounds of US tariffs, if imposed, could severely affect the tech ecosystem.
In the wake of the last-minute collapse of a deal to end the months-long US-China trade war, the Trump administration threatened to impose 25 per cent tariffs on all US$300 billion of US imports from China.
The move would raise the price of key components that go into one of the world’s most coveted smartphones, which is Apple’s biggest revenue driver.
The administration’s warning came after the import tax rate increased on Friday on a portion of US$200 billion of Chinese goods.
“The announced tariffs, if implemented, will be the gut punch for tech companies and its suppliers,” said Dan Ives, a New York-based tech analyst at Wedbush Securities. “That would cause a supply chain disruption and depress the sector throughout next year.”