Another Donald Trump presidency could get a little tricky for Apple . The news Trump’s decisive victory over Vice President Kamala Harris in the 2024 presidential election comes with varying implications for Apple investors. Trump is seen as being more lenient on regulatory issues, which would be a boon to Apple and its Big Tech brethren. However, Trump has also promised hefty tariffs on imported goods from China where Apple does nearly 20% of its business and manufactures many of its key products. Bank of America analysts feel Trump could help fix Apple’s regulatory woes in the U.S. and abroad. Earlier this year, the Justice Department sued Apple — alleging the company’s iPhone ecosystem is a monopoly. At the time, Apple said the lawsuit had no merit and would defend against it. European regulators have also accused Apple of breaching their new tech rules — imposing billions of dollars in fines for allegedly thwarting competition. BofA analysts said an incoming Republican administration may be “more inclined to favorably resolve” these cases and push European officials for less regulation. Trump’s proposed tariffs could spell trouble for Apple’s flagship device. That’s because not only is the iPhone Apple’s biggest money maker but the majority of the company’s products are made in China. Trump has proposed a 60% or higher tariff on U.S. imports of Chinese goods. That’s compared to the 7.5% to 25% rates levied during his first term. Apple got exceptions in Trump’s first term that muted the impact of tariffs on Apple. Without similar accommodations this time around, Apple might need to more move of its manufacturing to countries like India. Management would face a choice of raising prices on iPhones and other devices or accepting lower margins. Bernstein analysts considered the options, saying, “IT hardware companies could combat tariffs by accelerating their supply chain migrations away from China, and look to reduce [operating expenses] — but neither would be easy nor quick to do.” Shares of Apple were basically flat in afternoon trading Wednesday, considerably underperforming the market and other large tech players, such as Amazon , Nvidia and Microsoft. We own all three for the Club. Big picture These complex issues facing Apple come as CEO Tim Cook has strived for a good working relationship with Trump over the years. In a note to employees in 2016, Cook wrote, “I’ve never found being on the sideline a successful place to be,” explaining why he showed up to talk to Trump despite supporting Democratic rival Hillary Clinton in that election. Cook’s efforts to build relationships with the Trump administration worked in Apple’s favor at the time, according to Rosenblatt analysts. “Trump, in his first term was moving ahead with 15% duties on imports of Chinese-made consumer goods to be imposed starting in December 2019 into the holiday shopping period,” they said in a note Wednesday. “At the last minute, the administration backed down and announced a ‘Phase One’ trade deal with China.” The Rosenblatt analysts recalled that Trump credited Cook with “making a ‘good case’ about how Apple would be impacted, but its rival Samsung would not. ‘It’s tough for Apple to pay tariffs if it’s competing with a very good company that’s not,'” Trump said at the time. Trump and Cook also have appeared to maintain ties going into the 2024 election. Most recently, Trump claimed that he received a call from Cook over the financial penalties imposed on Apple by European regulators. During a podcast appearance last month, Trump said Cook called him personally. Trump said he told Cook: “I’m not going to let them take advantage of our companies. … That won’t be happening.” Apple never confirmed that exchange and was not immediately available to respond to CNBC’s request for comment Wednesday. However, Cook was among the tech executives to congratulate Trump in social media posts Wednesday. Bottom line Apple deftly navigated a first Trump term, but it’s way too early to say with certainty what Trump’s second term in office will mean for the California tech giant. Still, we’re maintaining our “own, don’t trade” thesis on this long-held portfolio stock. On the regulatory front, investors have largely been able to handle Apple’s antitrust risk. While Apple shares fell 4.1% on the day the DOJ lawsuit was filed in March , the stock began to largely trend higher a few weeks later. As recently as October, shares of the iPhone maker hit a record high, and are up 16% since the start of 2024. To be sure, that doesn’t mean a regulatory crackdown won’t present challenges down the line. But it’s too soon to worry as these cases typically years to play out. Plus, it can’t hurt that Cook and Trump have seemingly maintained a solid business relationship for years. As for tariffs, Apple has wisely expanded its manufacturing capabilities outside of China in markets like India, and it should continue to do so. This will help diversify its supply chain to hedge against potential geopolitical risk. In Trump’s second term, “Apple is going to need what I call special pleading,” Jim Cramer said during the Morning Meeting. “They are going to have to go to the government and say, ‘Look, we are going to have to move out of China into India. [But] it can’t be done overnight.'” “They will get their special pleading because they’re not regarded as a political company,” Jim predicted. (Jim Cramer’s Charitable Trust is long AAPL, MSFT, NVDA, AMZN. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Donald Trump speaks alongside Apple CEO Tim Cook (L) during the first meeting of the American Workforce Policy Advisory Board in the State Dining Room of the White House in Washington, DC, March 6, 2019.
Saul Loeb | AFP | Getty Images
Another Donald Trump presidency could get a little tricky for Apple.
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