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Take a deep breath. We just watched the tit-for-tat U.S.-China trade war begin again.
Last weekend President Donald Trump signed executive orders imposing 25% tariffs on imports from Canada and Mexico and 10% on goods from China.
The tariffs on Canada and Mexico were deferred after negotiations, but the ones on China took effect at 12:01 a.m. EST Feb. 4. Soon after, China announced retaliatory tariffs on select American imports and an antitrust investigation into Google.
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But when it comes to tariff risks among tech giants, Google (GOOGL) might not be the most vulnerable.
Apple (AAPL) could be.
That's because a significant portion of Apple's products are assembled in and shipped from China.
In cities like Zhengzhou and Shenzhen — often dubbed "iPhone City" — hundreds of thousands of workers can rapidly produce millions of devices, a scale that’s hard to quickly replicate elsewhere.
In the first Trump administration Apple received exemptions from the tariffs then imposed on China imports. But it probably won't happen this time, several analysts have stated.
These tariffs could drive up production costs, potentially leaving Apple with the choice of raising prices or absorbing the costs, which would cut into profit margins.
Rosenblatt analyst Barton wrote that he expected Apple to pass price increases to consumers, according to CNBC.
Apple didn't comment on the tariffs.
Bank of America on how the tariff might affect Apple
Bank of America sees the tariff’s effect as “manageable” as Apple can mitigate the effects by adjusting supply chains and pricing strategies.
Analysts led by Wamsi Mohan point to Apple’s ability to shift production outside China. “Most iPhone models can now be manufactured in India,” Mohan said.
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"As the new tariff is imposed on imports from China, Apple could have its manufacturing partners ramp up production in India and ship to the U.S.," he wrote. "This could also be done for other Apple products that are manufactured in countries including Vietnam, Malaysia, etc."
According to the Hindustan Times, a newspaper in India, Apple is now "manufacturing the entire iPhone 16 lineup, including iPhone 16 Pro and iPhone 16 Pro Max, in India,” an Apple spokesperson said.
Bank of America also said that “80% of the devices sold in the US can be sourced from outside of China” and estimated that Apple might hold off on price increases for now.