In the past few years, apple The American iPhone has been sold Made in Indiaairpods From Vietnam and Mac desktop Assembly in Malaysia. This is part of Apple’s strategy to diversify its manufacturing industry from China.

apple Strategy adopted As a hedge for the supply chain processed by the company The first Trump administration tariffsupply chain Covid-related issues and Chip shortage This reveals the risks the company has created primarily in China.

This seems to be a solid strategy. Until President Donald Trump’s “reciprocity tariffs” this week also hit the countries.

Now Apple has been leading the decline in technology stocks in a series of tariffs announced by Trump on Wednesday.

The company’s shares fell more than 9% on Thursday, while Nasdaq shares fell 6%. This eliminated iPhone manufacturers more than $300 billion in market cap, the worst day of stock performance since March 2020.

“When you look at the reciprocal tariffs in markets like Vietnam, India and Thailand, Apple diversifies its supply chains there, there is nowhere to be found,” Morgan Stanley analyst Erik Woodring told CNBC’s Closing Bell.”

To offset the tariffs, in the U.S., Apple may have to raise the price of its product line by 17% to 18%, Mulin estimates. But there is still a lot of uncertainty about what Apple will do and how China will retaliate against the United States, Woodlin said.

“In this type of environment, you have to think about the worst case,” he said. “It seems like both sides are digging in this geopolitical scenario.”

Apple did not respond to Thursday’s request for comment on its response to Trump’s tariffs or it also did not respond to CEO Tim Cook if prices could be raised in the U.S. Report This year’s meeting with Trump or what they discussed.

“We are monitoring the situation and there is nothing to add,” Cook told analysts on a revenue call in January.

Apple can still get product exemptions to U.S. tariffs, similar to how it imposed tariffs on China during the first Trump administration. However, if not, tariffs will threaten its business.

According to financial documents in November, Apple’s manufacturing industry “basically” were done in China, India, Japan, South Korea, Taiwan and Vietnam. Apple warned investors that tariffs could damage its business, prompting it to raise prices and even forcing it to stop offering certain products completely.

Apple’s Official Supplier List – accounting for 98% of its spending on materials, manufacturing and assembly – is very large for countries disproportionately affected by Trump tariffs.

India has 26%, Japan has responsibilities of 24%, South Korea has 25%, Taiwan has 32%, Vietnam has 46%, and Malaysia has 24%. Meanwhile, China is now downgrading its tariff rate after 34% on Wednesday to its current 20% tariff at a 54% tariff rate.

“The impact is particularly important if these restrictive measures apply to countries and regions where the company receives a large portion of its revenue and/or has significant supply chain operations,” Apple wrote in its filing.

Trump said the tariffs are intended to bring manufacturing back to the United States. He specifically quoted Apple in the announcement, saying, “They will build plants here.” Apple built a high-end desktop computer in Texas called the Mac Pro, but the vast majority of its final assembly was conducted overseas.

Trump touted on Wednesday Apple’s $500 billion investment includes plans to buy parts and chips from U.S. suppliers, but the company has not yet promised to make its large-capacity products on the U.S. coast.

The company’s boycott of final manufacturing in the United States is a long-standing position. In 2011, the late Apple founder Steve Jobs told former President Barack ObamaThese jobs haven’t returned“When asked about the made iPhone.

Analysts agree that this is unlikely, as Apple will be expensive to bring its supply chain to the United States

“The reality is that in our estimates, it will take three years and $30 billion to shift 10% of its supply chain from Asia to the U.S.,” said Dan E.A., an analyst at Wedbush.

Apple investors will wonder how much Trump’s tariffs will hurt the company’s revenue.

Earlier this year, several analysts Predict a relatively small decline In the company’s earnings per share under the new trading regime, it is based in part on the assumption that Apple can use its secondary production locations to avoid tariffs on U.S. goods imported from China.

Now, analysts are trying to model how Apple can balance price increases with the price increase of products with the extra cost of edible. Apple does not usually raise prices outside of new product introductions and is expected to release a new phone in September.

“There is no doubt that if the tariffs continue, it will negatively affect Apple’s fundamentals and negatively affect profit margins and earnings expectations,” CFRA research analyst Angelo Zino wrote in a note on Thursday.

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