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Trump visions exempting Apple from China tariffs.

 

 

On Wednesday, November 20, 2019, a breakthrough reached between US President Donald Trump and Apple's executive Tim Cook at keeping iPhone manufacturer from a coming round of China tariffs. Trump making a statement, "we have to treat Apple on a somewhat basis as we treat Samsung" during a tour with Cook of a manufacturing facility in Austin, Texas, that assembles high - end Mac Pro computers. Samsung is based in South Korea, which has a trade deal with the US.

 

Apple visions of creating manufacturing jobs in the US to Apple's reliance on China to build nearly all of its iPhones. $1 billion manufacturing facility in Austin has broken ground. Whereas cook joined a Trump administration advisory board for job training in February. Also, Trump boasting Cook's promise for three big plants. Approximately 20% of Apple's annual revenues come from China. Trump's trip to Texas, was scheduled while an impeachment hearing of Trump unfolded in Washington. Where Trump's efforts to U.S companies to add more manufacturing jobs domestically and also Apple's push to seek further relief from U.S tariffs on imports from China.

 

Fundamental Effects

Apple has the most of the room to lose if US-China trade war fail to reach any truce situations.10% tariff on China would lead to a 4% effect on EPS, which will account for around $0.50 in FY20 from Apple's financial data as if the tariff ultimately went into effect.

 

Exemption for Apple

Apple shares prices were showing some positive signals for the trading session on Wednesday. It's 67%  this year with the S&P 500 index's 24% growth. Signs of progress and plans for a limited "phase one" trade deal with China announced by the Trump administration last month looks slow. Trump has to say that China would much rather make a trade deal that the U.S would and he doesn't think that China is stepping up to the level that he wants. And also, Trump administration has started approving exemptions to its blacklist against doing business with Chinese telecom giant Huawei Technologies co. but it's not known by the fact that which companies have been approved.