Apple is no longer the most valuable company in the world; Microsoft is, following the rollout of President Donald J. Trump’s imposed tariff on imports from over 60 countries (via CNBC).
These countries are described as the “worst offenders” and subjected to additional taxes ranging between 11% and 104% for Chinese products. Implementing Trump’s tariff plans has negatively impacted Apple since it assembles approximately 90% of its products, including the iPhone, in China.
Consequently, the iPhone maker’s shares dropped by more than 20%, which wiped out up to $700 billion in market valuation. As a result, Apple’s market cap dropped $2.6 trillion, a tad lower than Microsoft’s $2.64 trillion.
Apple’s lifeline is too costly
According to a report by The Wall Street Journal, Apple is considering making supply chain changes, including shipping iPhones from India to the United States. Compared to its current arrangement, which could attract up to 104% in additional taxes, the Indian way would only attract 27%.
Apple CEO Tim Cook is seeking an exemption from President Trump’s stringent tariff plans. Still, the administration wants the iPhone maker to uproot its production operations from China to the United States. This is part of the administration’s broader plans to boost US manufacturing and protect jobs.
While speaking to CNN, Wedbush’s Dan Ives claimed that if Apple caves and fully transitions its production to the US, the price of an iPhone could rise to $3,500 amid depressed sales, especially in the Chinese market, and a delayed Apple Intelligence rollout.
Apple’s operations in China seem shaky at best, considering the negative impact of President Trump’s tariff plans on its shares. The President said he’d raise the tariff rate on Chinese goods by 34% from April 9, 2025.
Interestingly, China countered Trump’s tariff plan with a 34% tariff rate on goods from the US. As a result, President Trump indicated that he’d raise tariffs on Chinese goods by an additional 50%. In response to that, China has announced 84% retaliatory tariffs on U.S. goods in response to Trump.
Needless to say, this economic rollercoaster is likely to continue for some time until the US and China reach a new agreement. But for now, Microsoft is poised to fare better than its immediate competition in the tech space.
