Microsoft has overtaken Apple to become the world’s most valuable company. This shift in market dynamics comes as Apple faces growing investor anxiety over the escalating impact of U.S. tariffs on Chinese imports, a move that has seen Apple’s stock plummet by over 20%, wiping out approximately $773 billion from its market value.
Currently, Apple’s market capitalization stands at $2.593 trillion, trailing behind Microsoft’s valuation of $2.636 trillion. This change highlights the challenges faced by Apple, particularly as it grapples with the implications of tariffs imposed by former U.S. President Donald Trump’s administration. These tariffs, which have now reached a staggering 104% on imports from China, threaten to inflate supply chain costs significantly.
In response to these financial pressures, Apple is reportedly planning to reroute its production strategy by shipping iPhones from India to the U.S., benefiting from the lower 27% tariff rate compared to that of Chinese imports. This strategic move aims to mitigate the financial impact while maintaining market competitiveness.
The Trump administration had been urging Apple to relocate its production facilities to the United States. U.S. Commerce Secretary Howard Lutnick publicly questioned Apple’s continued reliance on Chinese manufacturing, suggesting that domestic automation and local labor could replace low-cost overseas workers, potentially creating millions of jobs within the country.
Financial analyst Dan Ives from Wedbush Securities emphasized the significant impact tariffs could have on Apple, noting that no company is more vulnerable to these economic policies. He warned that manufacturing iPhones domestically might result in a dramatic price increase to $3,500 per device. Furthermore, Ives estimates that Apple would require $30 billion and a minimum of three years to shift just 10% of its supply chain to the U.S.
As Microsoft ascends to the top spot in global market value, Apple faces critical decisions that could reshape its operational and financial strategies. The ongoing tariff situation presents both challenges and opportunities, prompting companies to reassess their global manufacturing and supply chain models.
