Impact of Trump Tariffs on Apple iPhone and Nike

From this Saturday, the majority of goods imported to the United States from around the world will face at least a 10% tariff. Analysts said Thursday that the series of large-scale tariffs imposed by President Trump on countries worldwide may fundamentally change the global trade landscape.

One of the notable outcomes of the tariff announcement is the impact on major companies like Apple and Nike. As of Thursday afternoon on the East Coast, Apple’s stock price fell by 9% and Nike’s by 13%. Apple’s market value evaporated over $300 billion, marking its worst single-day performance since March 2020.

According to a financial document from November 2024, the “vast majority” of Apple’s manufacturing operations are completed in China, India, Japan, South Korea, Taiwan, and Vietnam. Apple’s official list of suppliers—constituting 98% of its material, manufacturing, and assembly expenditures—is mainly concentrated in countries heavily affected by the tariffs.

Most iPhones are still produced in China, facing a 54% new tariff. India faces a tariff of 26%, Japan 24%, South Korea 25%, Taiwan 32%, Vietnam 46%, and Malaysia 24%.

Nike produces about half of its footwear in China and Vietnam, with around 25% from Vietnam. Tariffs will pose another obstacle for this sports shoe and apparel giant.

If the tariffs continue, Apple will face tough choices: absorbing additional costs or passing them on to customers. Apple sells over 220 million iPhones annually; its top markets include the United States, China, and Europe. Currently, Apple’s sales in key markets are struggling.

Reuters reported that stagnant demand could bring additional pressure on Apple’s profits, particularly if costs rise due to tariffs. Angelo Zino, a stock analyst at CFRA Research, said the company would struggle to pass on cost increases of over 5% to 10% to consumers.

“We expect Apple to delay significant iPhone price hikes until the launch of the iPhone 17 this fall, as this is the company’s customary way of handling planned price increases,” he said.

Morgan Stanley analyst Erik Woodring stated on CNBC’s “Closing Bell” that in order to counter the impact of tariffs, Apple may have to raise prices of its product line by 17% to 18% in the US.

In 2019, when Trump first entered the White House, Apple was granted tariff exemptions.

Global investment bank Citigroup stated, “If Apple does not receive exemptions this time and is hit with cumulative 54% tariffs from China without being passed on, we estimate the company’s total gross profit margin will face a negative impact of about 9%.”

Trump stated the tariffs aim to bring manufacturing back to the US. He specifically mentioned Apple in his statement, saying “they will be building plants here.” Apple manufactures a high-end desktop computer called the Mac Pro in Texas, but the majority of its final assembly is done overseas.

On Wednesday, Trump said Apple is investing $500 billion in the US, including plans to buy parts and chips from US suppliers, but the company has not committed to producing its bulk products domestically.

For companies looking to diversify production dependencies and reduce the risk of trade conflict with China, Vietnam has become a popular destination. According to data from the US Trade Representative’s Office, US imports from Vietnam grew to $136.6 billion in 2024, a roughly 19% increase from 2023.

Currently, the US imposes a 46% tariff on products imported from Vietnam, which will increase costs for major companies in the clothing, furniture, and toy sectors.

CNBC reported that Adidas stated it would assess tariffs and monitor their impact on business. According to the US Footwear Distributors and Retailers Association, nearly one-third of US footwear imports in 2023 came from Vietnam, based on the latest annual data.

Shoe brand Steve Madden announced in an earnings call in November last year that it plans to cut imports from China to the US by up to 45% in 2025. However, CEO Edward Rosenfeld noted that Steve Madden is speeding up entry into countries like Vietnam, as well as Cambodia, Mexico, and Brazil.

As of this month, Vietnam is the second-largest supplier nation to Deckers Brands, the parent company of Ugg and Hoka. The company has 68 supply chain partners in Vietnam, second only to its 125 suppliers in China. Deckers’ stock price fell over 15% on Thursday.

If the tariffs continue, the amount of goods Americans purchase from other parts of the world could significantly decrease, as Americans remain the largest shoppers worldwide. Those willing to pay higher prices due to tariffs will have less money to spend on other items.

Businesses will increase sales in other markets, putting enterprises in those target markets at a disadvantage.

On Wednesday afternoon, Trump announced tariffs on almost all US trading partners but had particularly harsh words for Beijing. He said he highly respects China, but Beijing has taken great advantage of the US.

Trump held up a chart listing the countries and regions that, according to him, have set trade barriers against US goods, stating, “If you look…top of the list is China at 67%. That’s the tariff (Beijing) imposes on the US, including currency manipulation and trade barriers.”

“We’re going to charge (China) a reciprocal tariff of 34%,” Trump said, “In other words, they’re charging us, we’re charging them less. So how can someone not be happy?”

The Chinese Ministry of Commerce called the move a “typical act of unilateral bullying” and said they would take “resolute countermeasures to defend their interests.”

Experts believe Beijing has valid reasons to be concerned.

By imposing high tariffs on Southeast Asian countries like Cambodia, Vietnam, and Laos, the US market is almost “closing the door” on Chinese goods, making it impossible for Chinese companies to evade tariffs in Trump’s second term through supply chain adjustments.

Among the top 10 countries and regions subject to the highest reciprocal tariffs, five are Asian countries.

Trump also signed an executive order terminating the tariff exemption policy for small packets from China.

Stephen Innes from investment firm SPI Asset Management told the BBC that Trump’s tariffs represent a “comprehensive assault on extending Beijing’s supply chain.”

“Vietnam…along with other surrounding countries is suffering collateral damage from adjustments in US trade policy,” he added, emphasizing that this is not about direct confrontation but rather strategic containment through a tariff war.

Pushan Dutt, a professor at INSEAD, told the BBC that the new taxes imposed on Southeast Asia will be “hard to bear” for Beijing.

Dutt pointed out that as the Chinese economy faces challenges, Beijing will have “tough choices” ahead in the coming days.