Apple faces pressure from tariffs in the US-China trade negotiations, and iPhone prices could increase.

Taiwan • Business • 05/07 02:00
Apple faces pressure from tariffs in the US-China trade negotiations, and iPhone prices could increase.

In April 2025, former President of the United States, Trump, announced a new round of high tariffs on Chinese goods, putting pressure on Apple Inc. due to rising costs and the need for supply chain restructuring, which could lead to higher iPhone prices. The U.S. and China began their first trade talks in Switzerland, but their positions remained divided. Trump's tariff policy has already had an impact on the U.S. stock market, and the Federal Reserve is struggling between weak economic data and inflationary pressures. The rapid development of artificial intelligence has raised policy and ethical concerns, posing a challenge for global governance.

Key Updates

05/08 03:04

Federal Reserve Chair Powell warns that high tariffs could lead to inflation in the U.S. rising to 4%, the unemployment rate reaching 5%, and a slowdown in economic growth.

On May 7, 2025, Federal Reserve Chair Powell warned at a press conference following the Federal Open Market Committee meeting that if the Trump administration continues its significant tariff measures, they will triple-impact the U.S. economy: inflation rates rising to between 3.5% and 4.0%, unemployment rates increasing to between 4.5% and 5.0%, and a slowdown in economic growth. Powell emphasized that these impacts exceed the Federal Reserve's expectations, increasing the uncertainty and challenges for monetary policy.

05/07 22:32

Trump's tariff policies have increased Ford car prices, and CEO Farley says this will affect billions of dollars.

The administration of former U.S. President Trump reimposed high tariffs on imported cars and components, leading Ford Motor Company to increase the prices of three models produced in Mexico starting May 2, including the Mustang Mach-E, Maverick, and Bronco Sport. Ford CEO Jim Farley stated that the tariffs would have a multi-billion dollar impact on the company's operations and disrupt global supply chains and influence trade policies. Ford estimates that its adjusted earnings before interest and taxes (EBIT) in 2025 will decrease by about $1.5 billion and has suspended its full-year profit guidance to address economic uncertainties due to the tariffs.

05/07 15:30

U.S. tariff policy severely impacts businesses: Skechers acquired by 3G Capital, while the Federal Reserve keeps interest rates unchanged as a measure against inflation.

In April of 2025, the United States imposed tariffs of up to 145% on Chinese goods, leading to higher business costs and supply chain disruptions. Skechers, the third-largest footwear brand globally, unable to withstand the tariff pressure, was acquired by 3G Capital for $9.4 billion, marking the end of its history as a publicly traded company. On May 7, the Federal Reserve maintained interest rates, focusing on fighting inflation even as economic growth slowed. This tariff policy reshaped the global trade landscape and had a profound impact on the fate of American businesses.

05/07 06:00

China-US Tariff War Intensifies: China's Exports to the US Decrease by 19% Year-over-Year in April 2025, Shipping Volume Drops Sharply

In April 2025, the tariff war between China and the US heated up, leading to a 19% year-on-year decrease in Chinese exports to the US and a sudden 45% drop in shipping volume. Although shipments from Chinese ports increased by 7% year-on-year, trade flow with the US shrank. To avoid the 145% US tariff, Chinese companies turned to rerouting trade through Southeast Asia, but this route will face strict US scrutiny starting in May. The report gathers official and market data to analyze the impact of tariff policies on Chinese exports.

05/07 03:06

Trump's tariff talks with Canadian Prime Minister Trudeau ended without results, the U.S. stocks fell across the board on May 6,

On May 6, U.S. President Trump met with Canadian Prime Minister Justin Trudeau at the White House, but they failed to reach an agreement on tariff issues, heightening market fears of a trade war. On that day, all four major U.S. stock indices declined, with the S&P 500 index dropping 0.77%, breaking a nine-day winning streak. In March, the U.S. trade deficit widened to $140.5 billion, an all-time high, highlighting the economic pressure from increased imports and trade policy uncertainty.

05/07 02:00

Apple faces pressure from tariffs in the US-China trade negotiations, and iPhone prices could increase.

In April 2025, former President of the United States, Trump, announced a new round of high tariffs on Chinese goods, putting pressure on Apple Inc. due to rising costs and the need for supply chain restructuring, which could lead to higher iPhone prices. The U.S. and China began their first trade talks in Switzerland, but their positions remained divided. Trump's tariff policy has already had an impact on the U.S. stock market, and the Federal Reserve is struggling between weak economic data and inflationary pressures. The rapid development of artificial intelligence has raised policy and ethical concerns, posing a challenge for global governance.

05/06 18:32

Lofler, Administrator of the U.S. Small Business Administration, states that small businesses support Trump's tariff policy and challenge negative media reports.

At the "Small Business Week" event in Washington, D.C., Kelly Loeffler, the Administrator of the U.S. Small Business Administration, stated that the mainstream media's criticism of Trump's tariff policies is at odds with the support from small businesses. She is advocating for the "American Manufacturing Financing Act" to increase loan limits to bolster the manufacturing sector and help businesses restructure their supply chains to lessen dependence on China. Loeffler highlighted the confidence that small businesses have in Trump's policies and pointed out a surge in loan applications, which indicates that businesses are preparing to expand.

05/06 14:01

The EU plans to impose tariffs worth 100 billion euros on US goods: The risk of trade negotiations breaking down intensifies

On May 6, 2025, the European Union plans to impose retaliation tariffs on approximately 100 billion euros worth of U.S. goods as a precautionary measure to prevent potential breakdowns in trade negotiations. This action will add to the current tariffs on 21 billion euros of U.S. goods and may also extend to restrictions on services and export controls. The EU has expressed concerns about the U.S. expanding tariffs and investigations and has begun internal consultations to prepare for a comprehensive counteraction. Since negotiations began in April, progress has been slow. The EU is seeking substantial concessions but is not ruling out any options.

05/06 13:02

In April, China's port shipments rose by 7% and air transport surged by 30%. Despite the trade war, exports are still expected to grow.

Despite the escalating US-China trade war, with the US imposing tariffs as high as 145% on Chinese goods, China's trade logistics data for April shows resilience. According to data from China's Ministry of Transport, for the week ending April 27, ports across the country handled 6.7 million TEUs, an increase of 7% compared to the previous year; the number of international air cargo flights rose by 30% compared to the previous year. Bloomberg predicts a 2.5% increase in exports for April compared to the previous year, indicating strong performance despite high tariffs. The reduction in cargo ships on US-China routes highlights the pressure on exports to the US, and the Chinese government and businesses are adjusting their export strategies to tackle these challenges.

05/05 22:31

Carvana is Actively Acquiring Used Cars: Change in Strategy Due to Supply and Demand Imbalance in the U.S. Car Market

In the context of the imbalance between supply and demand and soaring prices in the U.S. used car market, Carvana is actively purchasing vehicles from consumers to cope with tariffs and supply shortages. The company has adopted a profit-oriented strategy and is responding to the demand for high-quality used cars. Although Carvana offers convenient options for selling cars, in a seller's market, holding onto or carefully selling a car might be more advantageous.

Apple Faces Tariff Pressure, Increasing Pressure to Adjust iPhone Prices

In its second-quarter 2025 financial report, Apple Inc. noted that in response to the Trump administration's new round of tariff policies, the company estimates an additional $900 million in costs. Although this accounts for less than 2% of total sales costs, CEO Tim Cook warned that the impact was mitigated this quarter due to "special factors," and if the situation remains unchanged, the pressure will further intensify.

Melius Research analyst Ben Reitzes pointed out that if the Trump administration further implements "specific tariffs" on core components such as semiconductors, Apple's actual costs may need to be doubled, posing significant pressure on future quarterly reports. Since the announcement of the new tariff measures on April 2, Apple's market value has evaporated by more than $350 billion, far exceeding the declines of other tech giants.

Currently, Apple is still choosing to absorb the tariff costs itself, but analysts generally believe this strategy is unsustainable. Srini Pajjuri of Raymond James stated that to maintain high profit margins, Apple's most likely response is to raise iPhone prices. Visible Alpha data shows that since the launch of the Pro series in 2019, the average iPhone price has risen from $755 to $963. In the future, high-end models like the iPhone 17 Pro may exceed $2,000.

However, against the backdrop of high inflation and shrinking consumer spending, the market's acceptance of high-priced phones is rapidly declining. Major U.S. telecom companies like AT&T and Verizon have clearly stated they will not subsidize higher phone costs, meaning consumers will directly bear the pressure of price increases.

U.S.-China Trade Talks Begin in Switzerland, Differences in Positions Remain

More than a month after the tariff war escalated, the U.S. and China began their first formal trade talks this week in Switzerland. U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer will meet with Chinese Vice Premier He Lifeng to discuss tariffs and economic and trade issues. This meeting is seen as a starting point for thawing relations, but Mnuchin made it clear that there are "no expectations of reaching a major agreement," emphasizing that the focus of this meeting is to "reduce tensions."

China, on the other hand, emphasized that the tariff war was initiated by the U.S., and China is willing to "fight to the end, but the door is open for talks," but the premise is that the U.S. must stop threats and pressure and engage in dialogue on an equal basis. A spokesperson for China's Ministry of Commerce pointed out that the U.S. has recently expressed a willingness to negotiate through various channels, and China, considering global expectations and its own interests, has decided to engage.

Although both sides have signaled a willingness to negotiate, significant differences remain on core issues such as tariff removal, technology transfer, and market access. Trump recently stated on NBC that American consumers should be willing to accept higher prices and fewer choices in exchange for rebalancing trade with China.

Trump's Tariff Policy Impacts U.S. Stocks, Market Volatility Increases

The new tariff policy announced by Trump on April 2 has had a noticeable impact on U.S. stocks. The S&P 500 index fell 10% within two trading days, and the Dow Jones Industrial Average dropped nearly 4,600 points. Although the market rebounded afterward, investor sentiment remains affected by policy uncertainty.

On Tuesday, U.S. stocks fell again, with the Dow Jones index dropping nearly 390 points, and the S&P 500 and Nasdaq falling by 0.8% and 0.9%, respectively. Healthcare stocks plummeted as Trump hinted at imposing tariffs on pharmaceuticals, with Eli Lilly and Moderna falling by 5.6% and 12.3%, respectively. Analysts pointed out that the market is currently dominated by tariff negotiation news, and investors remain uneasy about the future policy direction.

Veteran fund manager Paul Tudor Jones warned that even if Trump halves tariffs on Chinese goods, the stock market could still hit new lows. He noted that this is still the largest tax increase since the 1960s, potentially impacting economic growth by 2% to 3%.

Federal Reserve Observes Rate Cuts, Recession Risks Increase

The Federal Reserve held a policy meeting this week, and the market generally expects to maintain the benchmark interest rate between 4.25% and 4.50%. Despite Trump's call for rate cuts to stimulate the economy, Federal Reserve Chairman Jerome Powell emphasized the need to wait for more data support, particularly changes in the labor market.

The U.S. GDP growth rate for the first quarter was -0.3%, marking the first negative growth since 2022. Although April's employment data exceeded expectations, the market remains concerned about the economic outlook. Institutions like Goldman Sachs and PIMCO pointed out that the Federal Reserve is unlikely to cut rates prematurely due to predicted economic slowdown and will only act upon seeing actual signs of recession.

Wall Street Journal reporter Timiraos noted that the Federal Reserve is currently in "no man's land," caught between managing inflation and fostering growth. Premature rate cuts could lead to a resurgence of inflation due to tariffs and supply chain issues, resulting in more harm than good.

AI Development Raises Policy and Ethical Concerns

Amid global economic and trade turmoil, the rapid development of artificial intelligence has also become a policy focus. Nvidia CEO Jensen Huang pointed out that AI is entering the "reasoning stage," and in the future, AI agents capable of understanding rules and laws will emerge, reshaping the workplace and industry structure.

However, the development of AI also raises ethical and safety concerns. AI startup Anthropic advocates for export controls to prevent China from acquiring advanced AI technology to uphold democratic values. Nvidia opposes excessive regulation, arguing that it would weaken the competitiveness of U.S. companies and noting that Chinese AI researchers account for 47% of the global total, with significant innovation capabilities.

The U.S. government is about to implement the "AI Export Control Framework," restricting the export of advanced AI chips and model weights. This move has sparked industry division, reflecting that AI competition is not only a technological battle but also a contest of values and governance models.

References

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