Trump's Tariff Policy Deals a Heavy Blow to Tech Stocks: Apple's Market Value Plummets by $63.8 Billion in Three Days, Broadcom Initiates a $10 Billion Buyback Plan

In early April, U.S. President Donald Trump announced the imposition of high tariffs on China and other trading partners, causing turmoil in global financial markets. Apple's stock price fell by 19% over three consecutive days, wiping out $63.8 billion in market value, and accelerated the transfer of its iPhone production line to India to address tariff pressures. Broadcom, on the other hand, announced a $10 billion stock buyback plan to stabilize its share price. This policy has had a notable impact on tech stocks, with Apple seeking tariff exemptions from the U.S. to lessen the impact.

Apple's Stock Plummets, Market Value Wipes Out $638 Billion in Three Days

Since the Trump administration announced on April 2 reciprocal tariffs of up to 54% on Chinese goods, Apple's stock has plummeted for three consecutive trading days. According to CNBC, as of April 7, Apple's stock had fallen by 19% in total, resulting in a market value loss of $638 billion, closing at $181.46, a single-day drop of 3.7%[^1]. This downturn has made Apple one of the weakest performers among the "Big Seven" tech companies in the US stock market.

Analysts point out that Apple's heavy reliance on the Chinese supply chain is the main reason for its high exposure in this trade war. Although Apple has shifted some production to India, Vietnam, and Thailand, these countries are also on the Trump administration's high tariff list, making it difficult to completely avoid cost pressures[^2].

Trump's Tariff Policy Impacts Tech Stocks

The Trump administration's reciprocal tariff policy imposes a 10% base tariff on all imported goods starting April 5, with additional tariffs on major trade deficit countries beginning April 9. The total tariff rate on Chinese goods will reach 104%, and 26% on Indian goods[^3]. This move has sparked market panic, leading to a general decline in tech stocks, especially for companies highly dependent on the Chinese market and supply chain.

JPMorgan analysts estimate that Apple may need to increase global product prices by 6% to offset the tariff impact[^4]. UBS noted that if Apple chooses to absorb the tariff costs itself, the price of the iPhone 16 Pro Max could rise from $1,199 to $1,549, an increase of 30%[^5]. If prices are not raised, Barclays analysts estimate that Apple's earnings per share (EPS) could be revised down by as much as 15%[^6].

Broadcom Launches $10 Billion Stock Buyback Plan

In contrast to Apple, semiconductor giant Broadcom announced the launch of a $10 billion stock buyback plan during the same period. The plan has been approved by the board and is expected to be completed by December 31, 2025[^7]. Following the announcement, Broadcom's stock price rose by 5.37%, closing at $154.14.

Broadcom CEO Hock Tan stated that the buyback plan reflects the company's confidence in its AI chips and infrastructure software products. According to the company's March financial forecast, second-quarter revenue is estimated at $14.9 billion, exceeding the market expectation of $14.76 billion[^8].

Apple Accelerates Production Shift to India, Seeks Tariff Exemption

To cope with the tariff impact, Apple is accelerating the shift of its iPhone production line from China to India. According to The Wall Street Journal, Apple plans to produce 25 million iPhones in India by 2025, with about 10 million originally intended for the local market now redirected for export to the US to mitigate risk[^9].

Additionally, Apple has initiated emergency logistics measures ahead of the new tariffs taking effect. According to The Times of India, Apple used five cargo planes over three days at the end of March to transport a large number of iPhones and other products from China and India to the US to gain a buffer period before the tariffs take effect[^10].

Apple is currently seeking tariff exemptions for its products from the US government, similar to the treatment given during Trump's first term. According to the Daily Mail, Apple CEO Tim Cook is negotiating with the White House, hoping to obtain exemption status again[^11].

Challenges in Supply Chain Restructuring

Despite Apple's active promotion of the "friendshoring" strategy, dispersing production capacity to India, Vietnam, and Thailand, analysts note that if these regions are also hit by high tariffs, Apple's flexibility in supply chain management will be significantly reduced. Morgan Stanley estimates that if Apple chooses to absorb the tariffs itself, annual costs will increase by about $34 billion[^12].

Moreover, the possibility of relocating the iPhone production line back to the US is widely dismissed by the industry. Wedbush analyst Dan Ives noted that if Apple produces iPhones domestically in the US, the cost per phone could soar to $3,500, rendering it economically unfeasible[^13].

References

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