Trade war escalations between Trump and China to significantly impact Apple

Apple could be severely affected as Trump reportedly pressures countries to limit their business dealings with China, which will result in more retaliations against US companies.

China previously called Trump's trade war a joke and said it would not retaliate further than matching what was then said to be a 125% tariff imposed by the US. That tariff was then revealed to actually be 145%, and China did not escalate its own tariffs — although it did halt rare earth mineral exports.

Now, however, CNBC reports that China has responded to what appears to be Trump's next move. While not announced by Trump or any other country involved, it is believed that isolating China is a key part of the White House's tariff negotiations worldwide.

"China firmly opposes any party reaching a deal at the expense of China's interests," a spokesperson for the Chinese Ministry of Commerce said, in translation. "If this happens, China will not accept it and will resolutely take reciprocal countermeasures."

In a press release from the Chinese Ministry of Commerce, the spokesperson went further and, again in translation, accused the US of having "coerced all parties to start so-called 'reciprocal tariff' negotiations."

"China believes that all parties should stand on the side of fairness and justice on the issue of 'reciprocal tariffs'," continued the spokesperson, "stand on the side of historical correctness, and defend international economic and trade rules and multilateral trading system."

In recent days, Trump has claimed to be in discussions with China and according to C-SPAN, says he expects an agreement to be reached "over the next three or four weeks."

According to Politico, no such discussions have taken place, even though China might allow its new international trade representative to negotiate. It's reportedly because Trump insists on dealing only with China's President Xi Jinping.

What this means for Apple

Analyst Ming-Chi Kuo, the risks for Apple are severe. Countries could impose their own tariffs on components sent to them from China, for example.

Kuo's tweet continues by noting that "if only the US imposes high tariffs on Chinese imports, the risks [for Apple] are manageable."

"However, if other countries also raise tariffs on Chinese goods," he says, "Apple would need to establish more non-China iPhone production lines to meet demand in markets beyond the U.S., meaning the tariff risks for Apple would become immeasurable and entirely uncontrollable."

What happens next

Currently Apple is benefiting from an exemption to the China tariffs, although Trump repeatedly denies that there are any exemptions. At the same time, Trump also paused all tariffs — except for those on China.

Tim Cook was able to get Apple a tariff exemption because he's kept up a working relationship with Trump (right)

Apple is likely to face further tariffs after the conclusion of a spurious investigation into any national security concerns with semiconductor production. Trump says Apple has not been given what he calls "exception," but rather it belongs in a different "bucket' of tariffs.

That bucket is one concerning semiconductors, but White House documentation backdates the investigation to before Trump's "reciprocal" tariffs were announced. It's not clear why Apple or other firms were then put into the presumably general "bucket" of tariffs.

It is clear, though, that the investigation will be followed by tariffs. While the documentation invites submissions by interested parties and purports that it will only impose tariffs if there are national security concerns, it is now certain to impose them.

That's because commerce secretary Howard Lutnick has already said on April 15 that semiconductor tariffs are "coming in probably a month or two." Trump, at the same time, said they would be imposed "next week."

Despite Tim Cook having reportedly persuaded Trump to exempt Apple from the tariffs, it has also been confirmed that the relief is only temporary. Apple was granted its exemption late on Friday, April 9, and shares rose from $198.15 to $211.44 when trading opened the following Monday.

That's still far below the $225.19 they were trading at before the "reciprocal" tariffs were announced. And at time of writing, they are down yet again, to $190.90.