US President Donald Trump recently announced a three-month moratorium on all “reciprocal” tariffs that came into effect at midnight. Following the decision, Apple shares surged 15 per cent on April 9. This is a relief news for Apple, especially since the tariffs could have impacted their production facilities in India and Vietnam.
Apple shares surge – Wall Street reacted positively following the announcement, adding $400 billion to Apple’s market cap. The company’s market cap is now close to $3 trillion. This is Apple’s strongest single-day performance since January 1998, when Steve Jobs was interim CEO and the company’s market cap was around $3 billion.
Impact of tariffs – Last week, Trump had announced import taxes on all goods coming into the US, leading to a drop in stock markets globally. This also led to a drop in Apple shares, wiping off $700 billion from the company’s market cap. Apple’s dependence on China makes it particularly vulnerable, as these products are mostly made in Asian countries.Although Apple is still dependent on China, the company has tried to diversify its supply chain. Trump has increased tariffs on Chinese goods from 104 percent to 125 percent, while tariffs on other countries have been reduced to 10 percent. This will help Apple counter the impact of the US President’s aggressive tariffs on China.
Increasing investment trend in India – Apple is strengthening its relationship with India, where the company is investing heavily in both manufacturing and sales. The company’s manufacturing network in India is growing, allowing it to reduce its dependence on China. According to Bank of America analyst Vamsi Mohan, Apple expects to produce about 25 million iPhones in India this year.
