Trade Wars: White House To Put 104% Tariff on China For Not Bending The Knee, Apple Stocks Fall
Trade Wars: The Imperialists Strike Back!
President Donald Trump is set to impose an astounding 104% in levies across all Chinese imports on Wednesday, White House Press Secretary Karoline Leavitt announced on Tuesday. This comes on top of Chinese tariffs that were in place prior to Trump’s second term.
China was already set to see tariffs increase by 34% on Wednesday as part of Trump’s “reciprocal” tariffs package. But the president tacked on another 50% after Beijing didn’t back off its promise to impose 34% retaliatory tariffs on US goods by noon Tuesday, adding an additional 84% in duties.
Earlier Tuesday, China’s Commerce Ministry said it “firmly opposes” the additional 50% tariffs on Chinese imports, calling it “a mistake upon a mistake.” The ministry vowed to escalate its retaliation on US exports.
US stocks, which soared Tuesday morning, began moving lower off Leavitt’s comments. By 3 p.m. ET the Dow, Nasdaq and S&P 500 were all in negative territory.
“Countries like China, who have chosen to retaliate and try to double down on their mistreatment of American workers, are making a mistake,” Leavitt told reporters on Tuesday. “President Trump has a spine of steel, and he will not break.”
“The Chinese want to make a deal, they just don’t know how to do it,” she added. She declined to share what, if any, terms Trump would consider to lower tariffs on China.
Trump initially imposed a 10% tariff on all Chinese goods in February, with no exceptions, tying it to the country’s alleged role in aiding illegal immigration and getting fentanyl into the US. Last month, he doubled those rates.
China was America’s second largest source of imports last year, shipping a total of $439 billion worth of goods to the US, while the US exported $144 billion worth of goods to China. The mutual tariffs threaten to hurt domestic industries and are poised to result in layoffs.
And the early casualty of this move?
Apple (AAPL) stock fell on Tuesday, reversing earlier gains after the Trump administration confirmed the US will institute a levy of 104% on goods imported from China, effective Wednesday.
Apple shares were already reeling from Trump's initial 54% duty as Wall Street considered how the company would navigate the tariffs. And after a brief reprieve Tuesday morning, those anxieties quickly returned in afternoon trading.
Apple initially climbed as high as $190.34 after opening at $186.73. But investors began dropping out following the tariff confirmation alongside a broader market sell-off.
President Trump had said he would apply a 34% tariff on top of an existing 20% tax on Chinese goods during his "Liberation Day" press event on April 2, bringing the total tariff to 54%. In a post on Truth Social on Monday, Trump said he would add an additional 50% tariff on April 9 if China didn't withdraw its 34% tax by Tuesday.
Apple builds the majority of its iPhones in China, despite an effort to move more manufacturing to India. Trump has also placed a 26% tariff on goods from that country as well.
Baird Equity Research analyst William Power was already projecting the potential for Apple's gross margins to drop from 46.8% to 44.4% in 2025 and to 41.6% in 2026 under Trump's prior tariff plan, and the additional levy is bound to have a greater impact.
It's unclear how Apple will deal with the increase. The company won an exemption from tariffs during Trump's first term, but there's no guarantee it will be successful this time around.
Keep in mind this is a story that's constantly evolving and changing, so we'll see after Wednesday where it leads...
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