Tesla and Apple stocks dip as Trump's tariffs take toll
President Donald Trump's decision to impose tariffs on goods from China and Canada has significantly affected the market. According to CNBC, Tesla and Apple have reported stock value declines of 5 and 3 per cent, respectively.
To recap, Donald Trump signed a decree on Saturday implementing 25 per cent tariffs on goods from Canada and Mexico, excluding petroleum products, which are subject to a lower 10 per cent tariff. The US President also decided to implement 10 per cent tariffs on goods from China.
The new rates were originally scheduled to take effect on Tuesday, February 4. However, it has been confirmed that they will not apply to Mexico.
The announcement of tariffs on goods from China specifically impacted Apple and Elon Musk's Tesla. On Monday, Tesla's stock value fell by 5 per cent, while Apple's decreased by more than 3 per cent.
Tesla under pressure from tariffs and sales decline
Tesla, which manufactures about half of its vehicles in China, is grappling with rising import costs and a decreasing number of vehicle registrations in Europe. In January 2025, Tesla registrations in France fell by 63 per cent and in Sweden and Norway by 44 per cent and 38 per cent, respectively. As reported, this decrease is significantly more significant than the overall electric vehicle market.
An additional challenge 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, has acknowledged 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 taken measures to boost sales by reducing leasing costs for the Model 3 and Cybertruck.
Furthermore, Elon Musk's political decisions have also impacted the Tesla brand. According to Brand Finance, Musk actively supported Donald Trump's campaign and the far-right German AfD party, which led to a 26 per cent decrease in brand value in 2024.
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 relies heavily on Chinese factories, where most of its products are assembled.
In the past, Apple avoided tariffs through exemptions and relocating some of its production to India, Vietnam, and Malaysia. However, analysts now fear rising import costs will compel the company to increase device prices in the American market.
According to Bank of America Securities, if Apple can source 80 per cent of devices outside China, the annual earnings per share may drop by only 5 per cent. However, if half of the products are still sourced from China, the loss could amount to 12 pence 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 tariffs' impact on its operations.
