Apple (AAPL) stock fell nearly 5% on Tuesday, reversing earlier gains after the Trump administration confirmed the US will institute a levy of 104% on goods imported from China, effective Wednesday.
Apple shares were already reeling from Trump’s initial 54% duty as Wall Street considered how the company would navigate the tariffs. And after a brief reprieve Tuesday morning, those anxieties quickly returned in afternoon trading.
Apple initially climbed as high as $190.34 after opening at $186.73. But investors began dropping out following the tariff confirmation alongside a broader market sell-off. Shares ended the day off 4.98%.
At close: April 8 at 4:00:02 PM EDT
AAPL NVDA AMZN
President Trump had said he would apply a 34% tariff on top of an existing 20% tax on Chinese goods during his “Liberation Day” press event on April 2, bringing the total tariff to 54%. In a post on Truth Social on Monday, Trump said he would add an additional 50% tariff on April 9 if China didn’t withdraw its 34% tax by Tuesday.
Apple builds the majority of its iPhones in China, despite an effort to move more manufacturing to India. Trump has also placed a 26% tariff on goods from that country as well.
Baird Equity Research analyst William Power was already projecting the potential for Apple’s gross margins to drop from 46.8% to 44.4% in 2025 and to 41.6% in 2026 under Trump’s prior tariff plan, and the additional levy is bound to have a greater impact.
It’s unclear how Apple will deal with the increase. The company won an exemption from tariffs during Trump’s first term, but there’s no guarantee it will be successful this time around.
During a press briefing on Tuesday, White House press secretary Karoline Leavitt said Trump “believes we have the labor, we have the workforce, we have the resources” to bring iPhone manufacturing to the US.
But, according to Wedbush’s Dan Ives, doing so would take years and cause iPhone prices to skyrocket.
“The reality is it would take 3 years and $30 billion in our estimation to move even 10% of [Apple’s] supply chain from Asia to the US with major disruption in the process,” Ives wrote in an April 3 investor note.
Read more: What Trump’s tariffs mean for the economy and your wallet
“If consumers want a $3,500 iPhone we should make them in New Jersey or Texas or another state … The concept of making iPhones in the US is a non-starter in our view at $1,000. Price points would move up so dramatically it’s hard to comprehend and the near-term margin impact on Apple’s gross margins during this tariff war could be mind boggling for this US tech stalwart.”
