US President-elect Donald Trump is taking office soon. Once he does, Trump will enact a protectionist approach to the US economy. One of those ways is by imposing tariffs on imports from China. This will have quite an impact on many businesses in the US, but Apple could be the exception as Trump will waive China tariffs for the company.
Long-standing rivals
This is according to Deepwater Asset Management analyst, Gene Munster. In his latest report, Munster shared his market predictions for 2025. One of those predictions is that Trump will waive China tariffs for companies like Apple and Tesla.
According to Munster, “Apple and Tesla will receive tariff waivers (if Trump executes his proposed China tariffs) – Make no mistake, increased tariffs are coming for many manufacturers, but Apple and Tesla will be spared high tariffs – Trump doesn’t want Tesla to lose to BYD or Apple to lose to Samsung.”
This is because Trump is hoping to give these companies a competitive edge against its foreign rivals. For Tesla, it would be BYD, a China-based EV maker that is quickly catching up in terms of market share. For Apple, their chief rival in the tech and mobile space would be Samsung.
Apple and Samsung have been rivals for the past decade or so. Both companies are some of the largest smartphone makers in the world, with Samsung taking the number one spot. By waiving the China tariffs for Apple, it would definitely ease the company’s financial burdens.
The money saved from paying these tariffs could then allow Apple to spend more on research and development and marketing for new products. It remains to be seen if this could give Apple an edge over Samsung, but obviously having a tax break is welcome.
Trump’s China tariffs
From the first time Trump took office, one of his main focuses has been on the US economy. He has pushed for US companies to try and bring jobs back to the country. One of those ways is by imposing tariffs to discourage US companies from working with countries like China, and also to make it harder for China to do business in the US.
Apple’s CEO Tim Cook is acutely aware of the potential ramifications of a China tariff. In fact, back in 2019, then-President Trump actually met with Cook for dinner. During the dinner, Trump said that Cook “made a very compelling argument” for Apple to be exempt from these tariffs.
Cook also highlighted how some of Apple’s key rivals, such as Samsung, did not have to pay the same amount of tariffs. This is due to how Samsung’s manufacturing is largely located in South Korea.
2024-12-18 15:05:29