How Tariffs Can Still Bite Apple

Shares of iPhone maker Apple rose after the Trump administration announced a delay in new tariffs.


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Tariffs won’t hamper the launch of this year’s new iPhones after all. Next year’s far more important phone launch may be another story, however.

The Trump administration on Tuesday announced a delay in some planned tariffs on Chinese-produced goods. These include 10% levies on mobile phones and laptop computers that were originally set to take effect on Sept. 1. That would have seriously hampered


AAPL 4.36%

’s launch of this year’s iPhone crop, which typically takes place in late September.

Apple’s share price had fallen 6% since President Trump first announced the tariffs on Aug. 1—double the drop of the S&P 500 in that time. The stock was up nearly 4% midday Tuesday.

Those tariffs are now set to go into effect on Dec. 15, at least based on the current plan. That gives Apple plenty of time to import phones and laptops ahead of its most important sales period. The fiscal first quarter ending in December typically accounts for more than one-third of total iPhone units sold each year.

But Wall Street had largely written off this year’s iPhone cycle as unimportant anyway. Instead, analysts have been eagerly anticipating the devices coming in late 2020, which are widely expected to be Apple’s first phones equipped with high-speed 5G connections. Raymond James upgraded Apple’s shares last month, citing “increased conviction” of a 5G iPhone cycle beginning next year. Those phones are expected to spark a return to iPhone sales growth for Apple’s fiscal year ending in September 2021 after two consecutive years of projected declines, according to FactSet estimates.

That leaves plenty of time for trade tensions with China to improve—or worsen. Tariffs on a 5G iPhone would raise the costs on an already expensive device. Apple of course has said nothing about its plans. But investors have already dialed in a rather optimistic call.

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