Question

Describe how the tariff war is effecting Apple and how it can recover from this issue

Answer 1

President Donald Trump’s increased tariffs on $200 billion worth of Chinese goods would deeply impact Apple raising up iPhone prices which would eventually lower the demand. Apple is one of the product which Chinese market exports to US, because iphone products gets assembled in China because Chinese labour is cheaper which reduces the cost of production for Apple. China is a huge market for Apple. Roughly 20% of its revenue comes from the region, most of it via sales of iPhones. It reduced the sales of every product of Apple which even declined the share price of Apple. US is imposing tariffs on all the products even on those who are giving more income to US, apple is one of them. Apple can lower the tariffs by either selling for less prices in USA (so that atleast US customers would get benefit) or to promise the US government to help building some infrastructure in US. They can also wait for some more time as the tariff war would not stay forever.