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Apple (NASDAQ:AAPL) could face significant fallout if the U.S.-China tariff dispute deepens, according to a warning issued Monday by TF International Securities analyst Ming-Chi Kuo.
Kuo shared his analysis on social platform X, noting that the latest statement from China's Ministry of Commerce as reported by CNBC suggests that the U.S. may be using tariff negotiations to pressure its allies into curbing trade with China. If additional countries respond by increasing tariffs on Chinese exports, the risks for Apple could rise sharply.
The Ministry of Commerce said it would respond firmly to any international efforts it sees as undermining China's trade interests. China will not accept it and will resolutely take reciprocal countermeasures, the ministry said.
Kuo noted that Apple can manage if only the U.S. enacts high tariffs. But if a broader coalition follows suit, Apple would be forced to accelerate its diversification efforts, including building more iPhone production capacity outside of China. Under such a scenario, Kuo said, Apple's exposure would become immeasurable and entirely uncontrollable.
It's important to note that the stock posted a modest 0.43% gain over the past week, even as the S&P 500 slid 2.33%. However, over one month, six months and year?to?date it's fallen 10.64%, 17.62% and 23.63% versus the S&P's declines of 9.33%, 11.92% and 12.52%, respectively.
This article first appeared on GuruFocus.