Trump might use his “instincts” to exempt Apple from the 125% tariff on U.S. imports from China

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Trump might use his “instincts” to exempt Apple from the 125% tariff on U.S. imports from China

Lost in the whiplash everyone felt when President Trump did what he said he wouldn’t do the previous day or two and paused his tariffs for 90 days on most countries except for China, is the fact that now, Apple is worse off than ever. That’s because the tariff on China was hiked to 125% which could force Apple to triple the price of certain iPhone models in the U.S. But there might be a way out for Apple without its profit margins taking a hit or being forced to hike prices to ridiculously high levels.

Even though the president had said that there would be no exemptions, that was before yesterday when Trump took a step back and reevaluated what he had done. Speaking to the press yesterday, the president held out hope for many smaller companies by saying that those firms that got hit the hardest by the tariff scheme could get some relief. Of course, Apple is not a small business but that doesn’t take away from the impact on Apple products that the ever-rising tax on Chinese imports to the U.S. has.

Tim Cook could have trouble getting to sleep because of this one word uttered by the president

Trump’s relationship with Tim Apple Cook should count for something but what might have Apple’s CEO suffering sleepless nights (besides the Dodgers losing three straight) is that his dear friend the president said that exemptions would be handed out based on “instinct.” Look, when it comes to politics it is hard to find a flaw in Trump’s strategies because just 10 years ago there was no MAGA movement and look at it now. But even his most ardent (took that word right out of my PA bio) supporters would admit, especially in light of the last week, that when the president turns to his instinct, bad things have been known to happen.

Tim Cook’s relationship with President Trump might not be enough to save Apple from a 125% tariff. | Image credit-Apple

If you recall, on “Liberation Day,” we were talking about Apple getting socked with a 54% tariff on its exports to the States from China. That almost seems like a bargain now that we are in triple-digit tariff territory at 125%. An iPhone user himself, Trump isn’t worried about getting priced out of purchasing a new 1TB iPhone 17 Pro Max next year even if it costs over $4,000.

The problem remains China

If the president keeps the status quo in this pissing match with China, the big question will be how much pain Apple can take eating the higher import taxes itself before it finally feels that it must ask Americans to pay for some part of the import tax. Whether he knows it or not, the president did help Apple out a little by dropping tariffs on countries like India and Vietnam to 10% for the next three months. This will allow Apple to keep prices unchanged for iPhones made in India and other devices made in Vietnam. The problem remains China. Trump has no plan to reduce tariffs on China and could continue to raise them if the Chinese Communist Party (CCP) fails to back off and is hell bent on matching Trump tariff for tariff. I’m not saying China should cave on this. What I’m saying is that unless the U.S. president gives Apple an exemption, or at least some time to move more iPhone production to less-tariffed countries (and this is something that could take years) no one will be certain how much to budget for their next iPhone purchase.

As for Apple stockholders, their stomach acid is bubbling up toward their throat again today. After Wednesday’s huge rebound Apple’s stock is back in the red. As of 1:25 pm EDT, the shares are down $13.37 (a 6.72% decline) from the previous close of $198.85. A few days ago, Apple relinquished its title as the most valuable publicly traded U.S. company to Microsoft. Now, Apple is back on top but only by a slim margin. Apple has a market capitalization of $2.81 trillion compared to Microsoft’s $2.79 trillion.

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