Apple Inc. suffers a major financial setback since its market capitalization declined by approximately $640 billion within three trading days. The stock price dropped an additional 3.7% on Monday, which intensified the 19% market loss that started when investors reacted to U.S. tariffs on Chinese goods under President Donald Trump’s trade policies.
The company suffers maximum exposure because it depends heavily on Chinese manufacturing operations. Under the new plan, China must endure a 54% tariff rate. The expansion of tariff scope has created new pressure points for Apple’s production facilities located in India, Vietnam, and Thailand.
The technology sector’s top companies have made Apple Inc. the most exposed to the current challenges. The stock market stabilized from its worst week in over five years as Apple joined Microsoft and Tesla as the sole members of the seven-member megacap group to report losses on Monday.
The analysts predict Apple will need to make challenging business decisions. According to UBS analysis, the premium iPhone from Apple could rise by $350, which represents a 30% increase to compensate for new tariffs. Barclays analyst Tim Long predicts earnings per share will decrease by up to 15% if Apple decides to cover the costs.
The company should hurry up its supply chain restructuring plan to move imports from countries with lower tariff exposure to the United States. Investors face uncertain times ahead because global economic tensions continue to negatively impact Apple’s position as the world’s most valuable tech company.
