Apple Shares in a Time of Trade War: DealBook’s One Thing to Watch Today

Apple Shares in a Time of Trade War: DealBook’s One Thing to Watch Today

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Apple's new iPhone XR, which could become increasingly expensive if the U.S.-China trade war continues to escalate this week.

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Shares of some of America’s consumer goods companies and tech giants could be hit this week by Washington’s escalating trade battle with Beijing — and Apple may be particularly vulnerable.

The news: President Trump is expected to unveil tariffs of around 10 percent on $200 billion worth of Chinese goods as soon as Monday. The levies are expected to affect a broad range of consumer goods, from furniture to Apple Watches. Some Chinese officials advising the government in Beijing have proposed restrictions on the sale of materials and equipment that are important for American manufacturers, according to The Wall Street Journal, citing unnamed sources. Those officials specifically said that such curbs could affect Apple, though they didn’t explain how.

Back story: Apple has warned that the tariffs could hurt sales of its devices, including Apple Watches and HomePod speakers. In a letter to the United States trade representative, Robert Lighthizer, sent earlier this month, the company wrote: “Because all tariffs ultimately show up as a tax on U.S. consumers, they will increase the cost of Apple products that our customers have come to rely on in their daily lives.”

What it means: New levies and extra punitive actions by China could force Apple to raise the prices of its devices just ahead of the holiday season — a crucial sales period for the company. There appears to be little sign that either Mr. Trump or the Chinese government will de-escalate the situation.

What to watch: Apple’s stock price. Its shares fell 1 percent on Friday as reports of the new tariffs emerged, and a further 0.5 percent in premarket trading on Monday.

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