US-China Trade War Threatens Apple's Earnings Recovery

The ongoing US-China trade war continues to pose significant risks for corporate earnings in China, with Morgan Stanley highlighting a potential downturn in earnings growth as companies shift focus to domestic buyers. The situation remains particularly dire for Apple, which relies heavily on Chinese supply chains; analysts warn that the increased tariffs could force Apple to raise iPhone prices significantly, potentially pushing them up by 85%. Despite a temporary pause on some tariffs, Apple's stock has taken a hit due to the uncertainty surrounding trade negotiations and the cumulative tariff rate now exceeding 145%. Jim Cramer expressed concerns that rising costs from overseas manufacturing could adversely affect Apple and its partners, as the company has been stockpiling iPhones to mitigate tariff impacts. As tensions escalate, Apple's market valuation has been challenged, with its stock price declining and its status as the most valuable company in the US at risk. The trade war's repercussions have added volatility to the global stock market, with analysts warning that the situation could worsen without resolution.