What happened: Apple suppliers in China will consider shifting production out of the country if US tariffs reach 25%. The American tech giant and its partners are assessing their supply chains in the US and China amid tensions between the two countries. A 10% tariff could result in an earnings-per-share (EPS) decline of $1 for Apple if all its hardware in the US is subject to the levy and the company absorbs the costs. However, a 25% tariff would result in an EPS decline of $2.50.
Why it’s important: iPhones have so far remained unaffected by the US-China trade war. However, President Donald Trump said last month that tariffs could be imposed on smartphones and laptops that are made in China. The country has long been Apple’s primary production base for the majority of its hardware. Its supply chain spans hundreds of companies, with firms including Hon Hai Precision Industry and Pegatron assembling its products.