As U.S. President Donald Trump is pushing iPhone manufacturer to play ball in his high-stakes international Trade War, analysts shrug off the move's impact on Apple Inc.'s (AAPL) share price.
Apple Inc. AAPL shares declined 1.1% in early trading on Monday after the U.S. President has called on the company to manufacture its products in the United States over the weekend. This is the most vocal attack from the White House on the Cupertino, California-based company, and has unleashed the war of words over the company's contribution to the U.S. economy.
"Apple prices may increase because of the massive tariffs we may be imposing on china, but there is an easy solution where there would be zero tax, and indeed a tax incentive," Trump tweeted on Saturday. "Make your products in the United States instead of China. Start building new plants now. Exciting! #MAGA"
Angelo Zino, senior industry analyst CFRA Research, said in an interview Monday that Trump's tweet and targeted tariffs on some of Apple's smaller product lines would have a transitory effect on the stock's price.
"Apple have been able to command higher prices, but that said I don't expect a lot of these tariffs to be implemented," Zino said. "Overall I think Trump is trying to apply as much pressure as possible to China."
If the measures are enacted, Zino said he believes Apple would be able to raise prices on loyal customers on the Apple Watch, AirPods and Mac mini products to compensate for the change.
CFRA Research, who reiterated a price target of $255 and rated the stock a buy, said the biggest risk to Apple related to the president's most recent social media blitz is if China retaliates by placing a tariff on the sale of Apple's iPhones in China, a move that would arguably cause more damage to China's economy than the United States.
Apple is a holding in Jim Cramer's Action Alerts Plus charitable trust.
U.S. plans additional tariffs that would impose 25% duty on about $267 billion worth of Chinese goods.
In a letter dated September 5, Apple said the anticipated tariffs would impact a range of Apple products, including Apple Watch.
The products that would be impacted by the new tariffs include Apple digital health, Apple Pencil, Air Pods, MacMini, according to the letter.
"Our concern with these tariffs is that the U.S. will be hardest hit, and that will result in lower U.S. growth and competitiveness and higher prices for U.S. consumers," Apple said, noting the company's contribution to the U.S. economy. "We expect our total direct contribution to the U.S. economy over the next five years to exceed $350 billion."
- Martin Cassidy contributed reported to this article.
