Jim Cramer is worried about tariffs. His analysis of how the economy and public companies would be hurt named only one company, and that was Apple Inc. (NASDAQ: AAPL). The reason is that part of the iPhone and other Apple products are “assembled in China.”
The market agrees with Cramer. When tariffs on Canada, China, and Mexico were announced, Apple shares plunged. They recovered when tariffs on Mexican and Canadian goods were delayed, but only slightly. The Trump administration kept China tariffs in place.
China’s nuclear option would be to block sales of Apple’s products in the country. That is a fringe case today. But, if a trade war worsens, it cannot be ignored entirely.
Apple has already lost ground in China. In December, iPhone sales dropped 18% year over year, according to Counterpoint. That left it in fifth place in market share behind local companies Xiaomi, Huawei, Huawei, Oppo, and Honor. There was a great deal of analysis about why this happened. Maybe the iPhone 16 was too expensive. Maybe its artificial intelligence product was not popular in China.
The company’s China problems showed up dramatically in its most recent quarter. The figures for what Apple called “Greater China” declined from $20.8 billion in the period a year ago to $18.5 billion. (It is worth keeping in mind that tariff problems would almost certainly hurt Mac and iPad revenue.)
Apple cannot disappoint the market more than it did with its earnings and the Counterpoint data. China tariffs would be a shattering blow. That is at the heart of Jim Cramer’s comments.
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