The implementation of increasingly aggressive economic policy by the United States is set to have a massive impact on a host of companies. With the tech sector in danger, specifically, Apple (AAPL) is set to face one of three potential tariff outcomes that can impact the stock. Indeed, one expert has outlined how the iPhone developer will cope with the import taxes.
They certainly aren’t the only ones, but the increased user base makes Apple subject to feeling the effects of the tariffs in ways other companies won’t. The company’s CEO met with US President Donald Trump earlier this week. He had sought to dissuade increased tariff activity. However, he proved unsuccessful, with the company now set to face a critical decision.
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Apple Faces Increased Tariff Risks: Here’s The 3 Ways They May Cope
Earlier this year, Apple announced a monumental $100 billion investment into the US. According to a CNBC report, they did so to hopefully deter the Trump administration from implementing tariffs that impacted the company. However, that proved unsuccessful, with those taxes still going.
The question is, what does that mean for consumers? Additionally, what does that mean for the stock? Well, Plexo Capital’s founding managing partner Lo Toney recently discussed Apple (AAPL) and the three potential tariff outcomes for the company that could impact the stock.
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According to Toney, the first option is for Apple to “squeeze the suppliers a little bit” to downplay tariff effects. However, he notes that this “probably already happened as a natural course of business, or subsidized by the telcos.”
Secondly, Toney noted that the implemented tariff cost can be “passed on to the consumer” through increased prices. That has long been viewed as the most likely scenario. Not just Apple, but a plethora of companies are expected to raise prices in order to cope with the import tax presence.
Finally, he said the implemented tariffs can still be “absorbed by Apple itself.” Although possible, it remains unlikely in the near term. Altogether, Toney assured, “It’s going to impact someone somehow.” The biggest question is, what option provides the least amount of negative impact on Apple in the long run?
