Apple Stock Faces Longest Decline Amid Trump 25% Tariff Threat

Apple Inc. is undergoing its longest stock selloff in over three years, driven by President Trump's threat to impose a 25% tariff on iPhones unless production is moved back to the U.S. This has caused the stock to drop around 22%, significantly underperforming the Nasdaq 100, and increasing market volatility as measured by the Apple VIX index. Analysts remain skeptical about the tariffs’ implementation but warn that even the threat undermines investor confidence, placing Apple in a difficult position of either absorbing higher costs or passing them to consumers, which could reduce demand amid sluggish growth and challenges in AI products. The potential tariffs could raise iPhone production costs by 90%, leading to an estimated 300-350 basis point decline in Apple's 2026 fiscal year gross margin and prompting lowered earnings forecasts. Despite the political volatility and tariff risks, some analysts note that if tariffs apply broadly to all foreign smartphones, Apple’s strong pricing power might help it remain competitive relative to peers. Overall, the uncertainty around trade policy is creating a challenging outlook for Apple's profitability and stock performance.