Trump urges investment as a "buying opportunity," prompting a 246-point rebound in the Dow, as the China-Europe tariff escalation leads to a 23% drop in Apple's stock price.

Taiwan • Business • 04/09 17:07
Trump urges investment as a "buying opportunity," prompting a 246-point rebound in the Dow, as the China-Europe tariff escalation leads to a 23% drop in Apple's stock price.

On April 9, President Trump of the United States urged investors to "stay calm" via social media, saying "now is a great time to buy," which helped boost the Dow Jones Industrial Average by 246 points at closing. As China and the EU imposed retaliatory tariffs on U.S. goods, global markets experienced turbulence, and Apple's stock price dropped 23% over four days, erasing more than $770 billion in market value. Trump reiterated his wish for Apple to relocate its iPhone production line back to the U.S., but analysts cautioned that this could raise costs to $3,500 per unit, putting pressure on both consumers and inflation.

Key Updates

04/11 14:09

Trump's Tariff Policies Spark Global Economic Shockwaves: U.S. Retirement Funds Suffer a $169 Billion Loss, European Central Bank Gears Up, Taiwan-U.S. Tariff Talks Kick Off

On April 2, President Donald Trump announced the implementation of a "reciprocal tariff policy" on 180 countries worldwide, resulting in a $169 billion loss for the top 25 state and local retirement funds in the U.S. within four trading days. The European Central Bank is preparing to tackle financial instability, and the EU forecasts that if the tariffs continue, the U.S. GDP will decrease by 3.3% before 2027. The U.S. has begun tariff negotiations with countries, including Taiwan and Israel. Taiwan is facing a 32% tariff impact and has proposed an industry support plan valued at 8.8 billion New Taiwan dollars.

04/11 13:09

Wells Fargo's first quarter profit surpassed expectations, CEO warns of potential economic impact of tariff risk in 2025.

Wells Fargo, the fourth-largest bank in the United States, announced its first-quarter earnings report on April 11, 2025, with a net profit of $4.89 billion, a 6% increase from the previous year, and earnings per share (EPS) of $1.39, exceeding the market expectation of $1.24. CEO Charlie Scharf warned that the U.S. government's recent tariff increases could hinder economic growth and stated that the bank is prepared for an economic slowdown in 2025. This statement dampened the optimistic sentiment in the banking industry, resulting in Wells Fargo's stock price rising only 1% on the day the earnings report was released.

04/11 12:39

Trump's 90-day tariff postponement did not stabilize the markets: the Asian stocks decline, the gold prices reach a new high, the yen soars to a two-year high

On April 9, President Donald Trump announced a 90-day suspension of higher tariffs on 75 countries, excluding China, in an effort to ease trade tensions, but this move failed to boost market confidence. Asian stock markets briefly rebounded but then fell back, with the Nikkei 225 index plunging 5.4%. The safe-haven sentiment drove gold prices to a record high, and the yen reached a two-year high against the dollar. Concerns about the escalating U.S.-China trade war persist, leading to funds flowing into safe-haven assets.

04/11 11:10

The United States' imposition of a 25% tariff on imported cars has shaken the global automotive industry, leading governments and companies around the world to respond actively.

On April 3, 2025, President Trump of the United States imposed a 25% tariff on all imported cars and components, causing a global upheaval in the automotive industry. The American automotive industry strongly opposed this decision, citing concerns over supply chain disruptions and increased costs. South Korea initiated an 11 trillion won support plan to stabilize its exports, Swiss companies pursued diplomatic efforts to lessen the impact, and Taiwan was placed on the U.S. list for postponed reciprocal tariff negotiations, beginning talks. This policy is reshaping the global automotive trade landscape.

04/09 18:08

The United States' 46% tariff on Vietnam has taken effect, putting pressure on Taiwanese businesses and the garment industry, prompting the Vietnamese government to launch diplomatic efforts.

On April 9, 2025, the United States implemented a 46% tariff on Vietnamese goods, affecting Vietnam's export economy, particularly impacting industries like garments, furniture, and toys. Taiwanese businesses with factories in Vietnam, such as Eclat and Makalot, are under pressure due to reduced orders. Vietnam's Deputy Prime Minister, Ho Duc Phuc, traveled to the U.S. to negotiate, expressing a willingness to reduce tariffs on U.S. goods to zero. A Reuters/Ipsos poll shows that 57% of Americans oppose this policy, fearing it will increase consumer goods prices.

04/09 17:07

Trump urges investment as a "buying opportunity," prompting a 246-point rebound in the Dow, as the China-Europe tariff escalation leads to a 23% drop in Apple's stock price.

On April 9, President Trump of the United States urged investors to "stay calm" via social media, saying "now is a great time to buy," which helped boost the Dow Jones Industrial Average by 246 points at closing. As China and the EU imposed retaliatory tariffs on U.S. goods, global markets experienced turbulence, and Apple's stock price dropped 23% over four days, erasing more than $770 billion in market value. Trump reiterated his wish for Apple to relocate its iPhone production line back to the U.S., but analysts cautioned that this could raise costs to $3,500 per unit, putting pressure on both consumers and inflation.

04/09 16:40

US-China Trade War Escalates: US Imposes a 104% Tariff on Chinese Goods, Taiwan's Electronics Industry Confronts Supply Chain Challenges

On April 9, 2025, the United States imposed a 104% tariff on goods from China, leading to a disruption in the global laptop supply chain. Brands like ASUS, Acer, Lenovo, HP, and Dell paused shipments to the U.S. for two weeks. Taiwan, being a key supply base, is facing tariff pressures from both the U.S. and China, prompting electronics companies to adjust their supply chain and market strategies accordingly. Taiwanese companies are considering shifting production capacity to India or Mexico to avoid the impact of high tariffs.

04/09 15:11

Trump's new tariff policies have triggered global market turmoil: U.S. stocks plunge a 12%, bond market experiences volatility, retaliatory tariffs are escalating.

On April 9, 2025, President Trump of the United States imposed a 104% tariff on Chinese goods and extended it to multiple countries, which sparked global trade tensions. China and the European Union quickly retaliated, leading to a sharp decline in the U.S. stock market, with the S&P 500 index dropping 12.1%. The U.S. bond market experienced turmoil, and Deutsche Bank warned that the Federal Reserve might need to initiate emergency quantitative easing. The Nobel Prize-winning economist Paul Krugman warned that this policy could trigger a financial crisis. Trump called on investors to stay calm, saying it's a good time to buy.

04/09 14:43

The Trump administration imposed a 32% tariff on goods from Taiwan, devastating the export industry.

On April 9, 2025, the Trump Administration imposed a 32% tariff on Taiwanese goods, severely affecting Taiwan's export economy, particularly the traditional manufacturing and information and communication technology (ICT) industries. Pre-orders for the Nintendo Switch 2 were delayed due to U.S. tariff policies, with sales estimates revised down to 15 million units from previous projections, priced at $449.99 and scheduled for release on June 5. This event highlights the disruptions in the global supply chain.

04/09 14:11

US-China Trade War Escalates: Trump Announces 104% Tariff Increase, China Responds, European Economic Forecast Revised Downward, Swiss Watch Exports Affected

On April 9, 2025, U.S. President Donald Trump announced a 104% tariff on all Chinese imports, and China retaliated by increasing tariffs on U.S. goods to 84%. This action impacted the global economy, as Italy and Spain consider lowering their economic growth forecasts, and Swiss watch exports suffering. Italian Prime Minister Giorgia Meloni plans to visit the U.S. on April 17 to meet with Trump to seek ways to ease trade tensions. The U.S. has already initiated trade negotiations with multiple countries to try to resolve the trade conflict.

Trump Declares "Buying Opportunity," Dow Rebounds Nearly 250 Points

At 7 a.m. Eastern Time on April 9, U.S. President Trump posted consecutively on his social platform Truth Social, urging investors to "remain calm" and emphasizing that "everything will be resolved smoothly." He further stated, "Now is a great time to buy!" These remarks quickly boosted market confidence, with the Dow Jones Industrial Average initially dropping over 200 points after the opening but then strongly rebounding to close up 246 points, a gain of 0.66%.

Although the market stabilized in the short term, JPMorgan Chase CEO Jamie Dimon warned that the trade turmoil triggered by Trump's tariff policies could lead to an economic recession. He noted, "No one wants this to happen, but if it does, hopefully, it won't last long." Trump selectively quoted Dimon, only emphasizing that "fixing trade and tariffs is a good thing," without mentioning the risk of recession.

China and Europe Simultaneously Increase Tariffs, Global Market Turmoil

After Trump announced tariffs of up to 104% on Chinese goods, China announced on April 9 that it would impose a 50% retaliatory tariff on U.S. goods starting April 10, bringing the total tariff rate to 84%. The European Union also passed a resolution on the same day to impose a 25% tariff on certain U.S. goods starting April 15, in response to U.S. steel and aluminum tariffs.

This move caused significant volatility in global markets. The European Stoxx 600 index plummeted 3.5%, hitting a new low since 2024, and the yield on the U.S. 10-year Treasury surged above 4.5%, indicating that even safe-haven assets were being sold off. The three major U.S. stock indices generally fell in early trading, with the Dow dropping 221 points at one point, the S&P 500 index down 0.13%, and only the Nasdaq slightly up by 0.59%.

Apple's Stock Drops 23%, Market Value Shrinks by Over $770 Billion

In this tariff storm, Apple Inc. became a major casualty. Due to its heavy reliance on supply chains in China, India, and Vietnam, the market is concerned that it will face high tariffs and cost pressures. Since Trump announced the new round of tariffs, Apple's stock has cumulatively fallen 23% over four trading days, with its market value shrinking from $3.36 trillion to $2.59 trillion, losing its position as the world's most valuable company to Microsoft.

According to estimates by Morgan Stanley, this round of tariffs could reduce Apple's annual profits by $33 billion, while Barclays predicts its earnings per share will decline by 15%. The CBOE Apple VIX index surged to its highest level since September 2020, indicating a sharp increase in market expectations for Apple's future volatility.

Trump Advocates for U.S. Manufacturing of iPhones, Analysts Warn of Rising Costs

Facing tariff pressures, Trump once again urged Apple to move its iPhone production line back to the U.S. He stated that the U.S. has enough labor and resources to achieve domestic production of iPhones. White House spokesperson Karoline Leavitt also emphasized that Apple has invested $500 billion in the U.S., demonstrating its confidence in American manufacturing.

However, analysts generally hold a skeptical view of this idea. Needham analyst Laura Martin pointed out that if iPhones were entirely produced in the U.S., each unit would cost as much as $3,500, far higher than the current level of about $1,000. Wedbush analyst Dan Ives also stated that this would increase Apple's overall production costs by 50%, and if passed on to consumers, it would drive inflation and dampen demand.

Additionally, Apple's supply chain is spread across Asia, and moving it to the U.S. would take several years and be difficult to replicate the complete industrial chain synergy found in China. Counterpoint Research predicts that if Apple passes on all tariff costs, the price of the iPhone 16 Pro Max could exceed $2,300.

Analysts Say Apple Faces a Dilemma, Market Reaction Reasonable

Ameriprise Financial Services Chief Market Strategist Anthony Saglimbene noted, "Apple faces a dilemma: either raise prices or absorb costs, both of which will harm its profitability." He believes that the market's sell-off of Apple reflects investors' concerns about its ability to cope with tariff challenges.

Nonetheless, some analysts remain optimistic about Apple's long-term prospects. Bank of America believes that the historic sell-off may provide a buying opportunity and predicts that the stock could rebound by more than 40% over the next 12 months. However, in the short term, tariff uncertainty will continue to dominate market sentiment.

References

People Also Ask...

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Apple's stock price dropped 23%. How does this affect investors?

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If Apple brings the iPhone production line back to the U.S., how will it affect consumers and inflation?

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If Apple brings the iPhone production line back to the U.S., the cost would shoot up to $3,500 each. Do you think people would actually pay that much?