Trump’s Renewed Trade War Isn’t Just Bad For Apple, But All US Tech Companies

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Here we go again. After thoughts that an all-out trade war with China had been averted, President Donald Trump has thrown fresh gas and lumber on a fire that seemed like it was burning down to embers. First there was another round of tariffs on $200 billion of Chinese goods. Then there was an Executive Order that bans US telecom companies from using gear from any company seen as a national security threat.

Huawei got that label after reports of leaks, vulnerabilities and backdoors were made public over the last two years. Chinese hacking, spying and corporate espionage have been a huge problem for the West for a long time, but it seems that Huawei is likely more scapegoat than grand mastermind.

While nothing but potentially Apple chargers are definitely affected by this new round of tariffs (so far), they are still having a hugely negative effect. Apple was back at the doorstep of a trillion dollar valuation a few weeks ago, but their stock plummeted as soon as news of these new tariffs went public. There is good reason for it, as the nationalist backlash in China is gaining momentum. As the biggest American target, Apple will bear a huge burden here.

According to a report from BuzzFeed News, there is already a lot of backlash and calls for boycotts of Apple products on Chinese social media. China has also retaliated with a 25% tariff on $60 billion in US goods. This is all very bad news for the company, as their most recent quarterly report indicated that the worst of their sudden downturn in China looked like it was over. That has almost certainly changed now.

The news isn’t just bad for Apple, either.

“Some Weibo users went farther and called for a rejection of other US technologies, too. “Trump doesn’t allow companies to use Huawei, then let’s not use Apple. We shouldn’t buy any phone that uses Qualcomm as well.”

All US tech companies that have a large presence in China will likely face the same backlash as Apple.

Unfortunately, the sitting US executive and legislative branches seem to have absolutely no grasp of the preeminent importance of the tech sector in the US economy. Tariffs, sanctions, calls for breakups and anti-trust saber-rattling are not the answers to problems that may exist. As I have said before, we have an entire government, both major parties included, wielding the sledgehammer instead of the scalpel. Previous inaction is never an excuse of over-reaction. Hopefully some of them will come to their senses before they put the sector under enough stress that it hurts our economy, raises prices and hinders US tech companies‘ ability to compete worldwide.


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