Donald Trump’s trade war with China could hurt iPhone sales

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Donald Trump speaks to supporters at an immigration policy speech at the Phoenix Convention Center in Arizona.
Donald Trump has been outspoken on the subject of China.
Photo: Gage Skidmore/Flickr CC

A state-controlled Chinese newspaper suggested that a “naive” trade war led by Donald Trump could hurt U.S. brands, including Apple.

President-elect Trump previously said he will put in place a 45 percent tariff on Chinese imports as a form of taxation to “stop [China] cheating” through currency manipulation.

The Global Times newspaper, however, warned that aggressive tariffs would result in “tit-for-tat” countermeasures, designed to hurt American companies doing business in China.

“A batch of Boeing orders will be replaced by Airbus. U.S. auto and iPhone sales in China will suffer a setback, and U.S. soybean and maize imports will be halted,” the newspaper noted. “China can also limit the number of Chinese students studying in the U.S.”

Tim Cook has been clear about his belief that China represents Apple’s future biggest market.

However, in the past Apple has been subject to punitive measures from the Chinese government, such as being removed from a list of high tech devices that public money is allowed to be spent on. Apple also suffered a blow when the Chinese government decided to force the company to shut down the iBook Store and iTunes Movies service in the country.

While Cook has made repeated visits to China — alongside multiple investments by Cupertino — there’s no doubt that a crackdown on Apple products would have a big impact on the company’s valuation.

Earlier this year, super-investor Carl Icahn dumped his Apple stock due to concerns about the instability of its success in China. “I don’t think it’s a price point [that would get me to go back into Apple stock],” Icahn told CNBC’s Scott Wagner. “I think it’s my opinion about what is happening in China…. I got out because I’m worried about China.”

If punitive actions wind up being taken against Apple, no doubt other investors would follow Icahn’s example.

Via: The Guardian