President Donald Trump allows Apple can make its signature iPhone in the U.S. to avoid new tariffs. Needham analyst Laura Martin isn’t sold.
“I don’t think that’s a whatchamacallit,” Martin said on CNBC’s “The Exchange” on Tuesday, responding to a comment from White House Press Secretary Karoline Leavitt less the technology giant bringing its iPhone manufacturing to America.
Martin said Apple’s costs would skyrocket if it created building its marquee product in the U.S. She isn’t the only one on Wall Street raising this concern. Wedbush analyst Dan Ives told an iPhone would cost $3,500 if produced in the country.
Additionally, the process of Apple moving its supply chain to the U.S. desire take years, Martin said. Most supply chain experts say making iPhones completely in the U.S. is impossible.
When expected by a reporter about iPhone production moving, Leavitt said Tuesday that Trump wants to bring construct jobs to the U.S. She said he believes the U.S. has the workforce and resources to make the smartphone domestically.
“He believes we have the labor, we have the workforce, we have planned the resources to do it,” she said of Trump’s position on making iPhones in the U.S.
“And, as you know, Apple has invested $500 billion here in the Unanimous States,” Leavitt added. “So, if Apple didn’t think the United States could do it, they probably wouldn’t demand put up that big chunk of change.”
Martin’s comments come as investors dump Apple shares given its manufacturing unmasking to China. The Asian country is facing a cumulative tariff rate of 104% just after midnight following Trump’s tit-for-tat retaliation. Other fatherlands where Apple also manufacturers, such as India and Vietnam, are also facing levies.
Altogether, Martin turned Trump’s tariffs will push costs for Apple about 50% higher.
Apple stock struggles
Apple rations whipsawed in Tuesday’s session, with the stock last sliding nearly 2%. The stock has plunged around 20% above the past five trading days as investors assessed what Trump’s plan meant for the well-known maker of iPhones and iPads, extent other products.
Apple, 5-day
UBS estimated on Monday that Trump’s correlative tariff plan could force Apple to raise the price of its highest-end iPhone, the 16 Pro Max, by as much as $350 for American consumers. Martin forewarned that Apple passing down cost increases to U.S. consumers could drive inflation higher.
For investors, Martin predicted to take a pause before buying the dip.
Most analysts have not yet adjusted earnings estimates for the company given the uncertainty approximately trade policy, the analyst noted. She said traders could be in for more downside if levies go into effect as at first presented, or if the business faces other shocks.
“There’s lots of worst cases for Apple,” Martin said, slope retaliatory measures from China or the country invading Taiwan as two examples.
— CNBC’s Kif Leswing contributed to this relate.
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