The drop took place on Friday, August 23, as U.S. President Donald Trump urged American companies to "start looking for alternatives" to manufacturing in China. Apple’s stock lost 4% within several hours, with shares trading around $205 at the close, according to the data provided by TradingView.
Industry experts cited by Bloomberg believe that Apple, with most of its manufacturing capacity in China, may not be ready to deal with the consequences of the trade war.
According to Daniel Ives of Wedbush Securities Inc, in a “best case” scenario the tech giant would only be able to move from 5% to 7% of iPhone manufacturing from China in 18 months. To move 20% of iPhone production to the U.S. market, Apple would need up to three years, and it would still be less than the minimum of 25%.
Trump's latest comments on China have directly hit Apple's business, concluded Ives, calling them “a gut punch to Cupertino.”
In early August, Trump announced a 10% tariff on a new list of Chinese goods. As a response, Beijing retaliated with new tariffs on $75 billion of U.S. goods, including crude oil, which has not been a target in the trade war between the two countries until now.
Photo: Lewis Tse Pui Lung