The stock value of Luxshare, an assembler of iPhones and AirPods, saw a decrease by 2.2% as Lens Tech, a renowned Chinese mobile screen fabricator, experienced a 1.8% dip. This fall in stock prices was observed amongst Apple suppliers listed in China on Monday, following the recent tariff threats issued by the US President Donald Trump targeted at imported iPhones.
Luxshare, a key player in the manufacturing of iPhones and AirPods, had its shares decline by 2.2%. Concurrently, Lens Tech, the manufacturer of mobile screens in China, also faced a 1.8% drop in its shares. Parallely, a decline of 1.1% was observed in the shares of Goertek, the maker of AirPods.
Barely this last Friday, Trump issued a threat to escalate his ongoing trade war to new heights. He specifically warned Apple that he might impose a 25% tax on any iPhones sold in the US that are not produced domestically. This warning aligns with his administration’s agenda for job repatriation.
These heightened tariff threats had an impact beyond just Apple, targeting a levied tax increase to 50% starting June 1. This move has stirred alarms of a potential reignition of the trade war led by the US, which seemed to be easing off in recent weeks. Investors across the globe are attuned to these developments, marking each change with bated breath.
Earlier in April, Trump declared hefty tariffs across nearly every country. However, the raging US markets responded by selling off American assets, which included government bonds and the US dollar. This led to the White House ceasing the implementation of most of these proposed penalty tariffs.
Despite the rollback of some tariffs, Trump managed to retain a baseline tax of 10% on the majority of imports. He further reduced the colossal 145% tax imposed on Chinese goods to a more modest 30%. All these shifts have kept global trade markets on high alert.
Apple has been ramping up its efforts to move most of its US-bound iPhone production to factories located in India by the end of 2026. This strategic move is planned as a proactive measure to sidestep potential tariffs that might be imposed by China.
Trump’s threat to implement a 25% tariff on iPhones not domestically manufactured has hastened these offshore manufacturing plans. Although, he did express that actualizing such a shift would depend on technology advancements that are yet to be accomplished.
Despite Apple’s sustained endeavors to decrease its dependency on China, the company remains susceptible to tariffs as 85% of iPhone production is still located within Chinese borders. Any tariff implementations therefore pose a significant threat to the company’s manufacturing pipeline.
Nonetheless, Apple has achieved considerable progress in India, managing to relocate 50% of the production for iPhones sold in the US to Indian factories. Additionally, this has enabled the support for Foxconn’s ambitious plans for a new factory in India, with an investment of around US$1.5 billion.
However, these diversification efforts seem inadequate to completely shield Apple from tariff-related hazards. Recent statements indicate an emphasis on iPhones being manufactured in the US, rather than just an emphasis on non-Chinese production, posing additional pressure on Apple’s global production dynamics.
In conclusion, the escalating trade war is forging an increasingly challenging landscape, impacting global stock markets and influencing major production decisions for tech giants like Apple. The focus on repatriating jobs is significantly altering the dynamics of iPhone manufacturing.
The final outcome of these tariff wars and their long-term impacts on the tech industry and global trade remain unpredictable. The unfolding sequence of events will heavily guide the strategic decisions of multinational companies caught at the crossroads of domestic priorities and global trade developments.