Tesla and Apple stocks dip as trump tariffs take toll
President Donald Trump's decision to impose tariffs on goods from China and Canada has resonated widely in the market. According to CNBC, Tesla and Apple recorded drops in their 5% and 3% stock values, respectively.
Let's recall that Donald Trump signed a decree on Saturday which provides for the imposition of 25% tariffs on goods from Canada and Mexico, except petroleum products, which are subject to a lower 10% tariff. The US President also decided to implement 10% tariffs on goods from China.
The new rates were initially supposed to take effect on Tuesday, February 4th, 2025. It is already known that this will not happen in Mexico.
However, the announcement of tariffs on goods from China hit Apple and Elon Musk's Tesla. On Monday, Tesla lost 5%, and Apple more than 3%.
Tesla under pressure from tariffs and sales decline
Tesla, which produces about half of its cars in China, is struggling with rising import costs and a declining number of vehicle registrations in Europe. In January 2025, Tesla registrations in France fell by 63%, and in Sweden and Norway by 44% and 38%, respectively. This is reported to be a significantly greater decline than the overall electric vehicle market.
An additional blow for the company is the weak demand for the Cybertruck. According to analyst "Troy Teslike," in 2024, Tesla ended the year with 10,600 unsold Cybertrucks, and the order list dropped to zero by the end of November.
Tesla's Chief Financial Officer, Vaibhav Taneja, admitted that the new tariffs could negatively affect the company's profitability. Although Tesla has factories in the USA, Germany, and China, the company has already reduced leasing costs for Model 3 and Cybertruck to boost sales.
Also significant is the impact of Elon Musk's political decisions on the Tesla brand. Musk actively supported Donald Trump's campaign and the far-right German AfD party, which, according to Brand Finance, led to a 26% decrease in brand value in 2024, CNBC reports.
Apple and the threat to its supply chain
Apple is also feeling the effects of Trump's decision. Despite diversifying its supply chain, the company still relies heavily on Chinese factories, where most of its products are assembled.
In the past, Apple avoided tariffs through exemptions and relocating some production to India, Vietnam, and Malaysia. Now analysts fear that rising import costs will force the company to raise the prices of devices in the American market.
According to Bank of America Securities, if Apple can source 80% of devices outside of China, the annual earnings per share may drop by only 5 cents. However, if half of the products still come from China, the loss could amount to 12 cents per share.
Apple has not publicly commented on the new tariffs. Still, analysts predict that the company will increase production in India and other Southeast Asian countries to mitigate the impact of tariffs on its operations.
