Apple's most loved product: iPhone may soon see some serious drawbacks as it may fall as a victim of the trade battle between China and the United States. Apple iPhone, which was earlier out of the tariff list, may now come under highly taxed products lineup as President Donald Trump plans to levy a surcharge of $500 billion on imports, which includes almost everything that is shipped from China to the U.S.
Apple's ethnic smartphone lineup of iPhone will also be a part of this tariff list, as Apple uses to assemble its handset lineup in China. Apple's California facility is known for the design of the phone, but the company's Bejing unit plays a crucial role in iPhone's making as it's described clearly on the phone's back panel:"Designed by Apple in California. Assembled in China."
The Impact of US-China Trade War on Apple's Business:
According to reports the United States usually imports a greater range of products from China. On the other hands, China's list of imports from the U.S. is relatively less. It amounts near about $130 billion only. Whereas, as per the Wall Street Journal's statistics, the U.S. imported about $45 billion in smartphones only in 2017. So, the U.S.-China trade war will definitely affect Apple's business as only iPhone's stake amounts to 9% of the total share of the Chinese smartphone market.
Apple iPhone's Fate in the U.S. and China:
However, in retaliation for the high surcharge on Chinese imports to the United States, China may also impose greater duties on the U.S. imports. As Apple iPhones are assembled in China and then shipped to the U.S., the Chinese government's strike may result in a higher price range of Apple iPhone lineups in the United States, as predicted by Phone Arena. Therefore, Apple may struggle a lot with iPhone's stakes in the U.S., which is the major selling market for the company's smartphone flagship.
After the U.S., China is the country which holds the second-highest customer base for Apple. Therefore, the trade battle between the U.S. and China may also result in a huge stock loss for Apple in China. Chinese government's retaliation against the Trump administration's tariff attack may also result in punitive actions against American companies (including Apple), which are operating in China.
Apple's Chief Executive Officer Tim Cook, who is responsible for Apple's huge success in China as well as in the U.S., remained silent in this high time of trade tensions.