Apple's stock price falls amid tariffs, loses top market value crown

Apple's stock price fell for four consecutive trading days starting from April 3, with a market value loss of over $770 billion following the announcement of U.S. President Donald Trump's "reciprocal tariffs."

The company is particularly vulnerable to the tariffs because of its heavy reliance on overseas supply chains for its product manufacturing.

As of Tuesday's market close, Apple's stock price had plummeted by 23 percent, bringing its market value down to $2.59 trillion. Microsoft's market value stood at $2.64 trillion, leapfrogging Apple to become the world's most valuable company by market value.

Trump's tariff policy has severely impacted the international capital market. Since April 3, the global stock market value has shrunk by around $10 trillion, slightly more than half of the EU's GDP. The U.S. stock market has suffered heavy losses, with the combined market value of the seven major U.S. tech giants evaporating by about $1.65 trillion during this period, China Media Group reported.

Currently, 90 percent of Apple's phones are assembled in China, forcing the company to confront a tough decision: whether to absorb the tariff costs internally or to pass them on to consumers, according to Bloomberg.

Morgan Stanley analysts estimate that this round of tariffs could cost Apple up to $33 billion in annual losses. Meanwhile, analysts at Barclays have warned that if Apple maintains its current price, its earnings per share could shrink by 15 percent, Caijing Magazine reported.

According to Reuters, analysts calculate that if Apple passes all the tariff costs on to consumers, the retail price of the iPhone 16 Pro Max in the United States will rise from the current $1,599 to $2,300.

In fact, Apple initiated efforts to diversify its supply chain during Trump's first term. It relocated some of its phone and headphone production to India, and transferred some manufacturing of headphones, watches and computers to Vietnam. Additionally, Apple expanded its computer production lines in Malaysia and Thailand. However, Trump's "reciprocal tariffs" on Southeast Asian countries are likely to further disrupt Apple's supply chains.

Bloomberg reports that it would be extremely challenging for Apple to manufacture its products entirely in the United States. Such a shift would require at least five years to initiate production and would likely double the cost of Apple devices, it says, significantly inflating the prices of Apple products, which would be disastrous for both the company and consumers.

Meanwhile, Apple has attempted to urgently airlift its iPhone products from India to the United States before the new U.S. tariff policy takes effect, in order to minimize the impact of rising costs due to tariffs. 

At the end of March, Apple arranged five flights within just three days, fully loaded with iPhones and other products, to be air-freighted from India to the U.S., The Times of India reported.

(Cover via VCG)