Apple Tariff Threat Sends Supply Chain Stocks Down 3%

Shares of companies related to Apple Inc. faced pressure during early trading, with Gaowei Electronics experiencing a drop of over 3% at one point. The decline came after former U.S. President Donald Trump threatened to impose a 25% tariff on iPhones sold in the United States if they are not manufactured domestically. Trump's statement, made on his personal social media platform, highlighted his longstanding demand for Apple to produce iPhones in the U.S. rather than in countries like India.

Trump's threat of additional tariffs sent ripples through the market, affecting several companies closely tied to Apple's supply chain. Gaowei Electronics, which supplies components to Apple, saw its stock price fall by 2.51%, closing at 21.4 Hong Kong dollars. Other affected companies included Qiu Tian Technology, which dropped by 2.3% to 6.81 Hong Kong dollars, and BYD Electronics, which declined by 1.93% to 33.05 Hong Kong dollars. Sunny Optical Technology also experienced a decrease, falling by 1.45% to 61.3 Hong Kong dollars.

Analysts weighed in on the potential impact of Trump's tariff threat. Analyst Ming-Chi Kuo from a prominent international research firm commented that, from a profitability standpoint, Apple would be better off absorbing a 25% tariff on iPhones sold in the U.S. rather than relocating its manufacturing operations back to the United States. This perspective underscores the complex trade-offs that companies face in the current geopolitical climate, where tariffs and trade policies can significantly influence business strategies and financial performance.