Amazon and Apple surge on China tariff reprieve
Amazon and Apple both had a lot to lose from sky-high tariffs on China.
Amazon and Apple, the megacap tech stocks with the most skin in the game regarding China, are soaring premarket after a temporary bilateral agreement was reached between the US and China. For the next 90 days, US tariffs on Chinese goods will drop to 30%, from 145%, and Chinese tariffs on US goods will drop to 10%, from 125%. In other words, they’re much closer to where they were before President Trump said anything about tariffs in the Rose Garden.
Apple makes the vast majority of its iPhones, which account for nearly half its total revenues, in China, and would have seen its bottom line hurt by high tariffs. In its latest earnings call, the company said the existing tariffs — Apple had been temporarily spared from tariffs on China but was awaiting sector-specific levies — would have cost it $900 million in the current quarter.
The stock is up 6% premarket.
Amazon ships many of its goods from China, so tariffs were set drive its prices up and its bottom line down. Amazon, which makes a good deal of cash from advertising, also had to worry about knock-on effects from the loss of some Chinese advertisers. The company’s latest earnings beat was clouded by the specter of tariff uncertainty.
Both Amazon and Apple — like Meta — would have incurred higher costs for equipment shipped from overseas that help power their AI ambitions.
Amazon is trading up more than 8% this morning.
