A new 10 percent tariff on Chinese goods worth $ 300 billion, imposed by the US President would cause Apple a problem and threaten to weaken demand for iPhones and hurt the company’s profits, analysts say.
According to BI report, economic analysts described the move as a “possible blow” for Apple if the company absorbed full tariffs that act as taxes on US imports from China and most Apple products will affects the company’s profits by nearly 4% in its fiscal year 2020.
If Apple passes consumer tariffs at higher prices, it could double iPhone demand by between 6 million and 8 million units, according to experts’ analysis of over the next 12 months.
Tariffs on Chinese goods will affect Apple’s profit by 4 % in fiscal 2020
“This decision makes Apple directly and clearly caught between the fires of the Washington and Beijing on Chinese goods, while Apple has kept silent about these new tariffs imposed by the US President Donald Trump,” analysts wrote in their comments on the resolution.
This is not the first time the Wall Street has debated the consequences Apple may face as a result of the US-China trade dispute. In last May, a team of analysts suggested that the price of a iPhone XS device which is worth $ 1,000, could increase by $ 160 due to a 25% tariff on Chinese goods worth $ 200 billion provided by the former Trump administration.
On Thursday evening, Trump announced on his Twitter account that the 10 percent tariff on Chinese goods worth $ 300 billion would come into effect on September 01.