Apple ( AAPL , Financials ) shares fell 5% on Tuesday, deepening a four-day slide that has erased 23% of the company's market value, after White House Press Secretary Karoline Leavitt said President Donald J. Trump believes iPhones can be manufactured in the United States.
Leavitts comments followed a statement by U.S. Trade Representative Jamieson Greer, who said the administration would not grant exemptions for individual products or companies from the presidents broad tariff policy. During the 2018 U.S.-China trade war, Apple received such an exemption for its iPhones, which are largely produced in China.
Analyst Dan Ives of Wedbush Securities said the tariff uncertainty has upended Apples supply chain and could lead to iPhone prices as high as $3,500 if the company is forced to manufacture domestically. He warned of potentially severe near-term margin compression.
Despite efforts to reduce its dependence on China, Apple continues to rely on the country for a significant share of its hardware production. Investment firm Needham recently estimated that Apples fiscal 2025 earnings could fall by at least 28% if the company does not receive relief from the latest tariff regime.
Apple and its suppliers also produce hardware in India, Vietnam and Brazil, all of which are now subject to U.S. tariffs. Apple recently shipped five airplane loads of iPhones from India to the U.S. to avoid a 10% tariff imposed on Indian goods, according to a report by The Times of India . The Wall Street Journal reported Apple is accelerating plans to expand manufacturing in India.
Meanwhile, trade tensions between the U.S. and China have escalated. In response to Trumps tariff expansion to all imports from China and other countries, China imposed a 34% tariff on select U.S. goods. Trump has threatened an additional 50% levy effective April 9 unless China rescinds the new duties. China responded it would fight to the end.
Apple is scheduled to report fiscal second-quarter results on May 1. Analysts expect earnings per share of $1.61 and revenue of $94.04 billion.
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