Shares of Apple Inc. suppliers fell across Asia on Monday after US President Donald Trump tweeted that the tech giant should make products in the United States if it wanted to avoid tariffs on Chinese imports, Reuters reports.
Trump’s comment came after Apple told US trade officials on Friday that proposed tariffs by Washington in an escalating trade war with China would affect prices for a “wide range” of Apple items, including the Apple Watch. It did not mention the iPhone.
Trump tweeted on Saturday that “Apple prices may increase because of the massive Tariffs we may be imposing on China – but there is an easy solution where there would be ZERO tax, and indeed a tax incentive. Make your products in the United States instead of China. Start building new plants now.”
Shares in China-based Apple suppliers Luxshare Precision Co. Ltd. (002475.CN), Shenzhen Sunway Communication Co. Ltd. (300136.CN) and Suzhou Dongshan Precision Manufacturing Co. Ltd. (002384.CN) all dropped as much as 10 percent.
Lens Technology Co. Ltd. (300433.CN), Universal Scientific Industrial Shanghai Co. Ltd. (601231.CN) and Suzhou Anjie Technology Co. Ltd. (002635.CN) fell between 6 and 8 percent.
In Taiwan, camera lens-maker Largan Precision Co. Ltd. slid nearly 8 percent, Foxconn, formally known as Hon Hai Precision Industry Co. Ltd., fell 3.4 percent, while assembler Pegatron Corp. dropped nearly 4 percent.
Taiwan’s ASE Technology Holding Co. Ltd., which counts Apple as one of its top clients, fell 2.9 percent.
Chien Bor-yi, an analyst at Taipei-based Cathay Futures Consultant, said Apple’s component supply chain in Taiwan would take a major hit if the US increased tariffs on Chinese imported products.
“People have concerns about the stock market. It’s not a seller’s market, but it’s also not a buyer’s market. No one knows how deep the well is,” he said.
The technology sector is one of the biggest potential losers in the US$200 billion tariff list proposed by Washington on Chinese imports because the tariffs would make imported computer parts more expensive.
Trump warned on Friday that he was ready to slap tariffs on virtually all Chinese imports into the US, threatening duties on a further US$267 billion of goods.
AAC Technologies (02018.HK) fell more than 5 percent. The company supplies acoustic components and haptic technology – which enables users to receive tactile sensations from an interface – for Apple products such as the iPhone, iPad and Apple Watch.
In Japan, Nissha eased 0.4 percent, Japan Display fell 0.7 percent and Sharp Corp. dropped nearly 1 percent.
“People are in a bit of a panic today. Looking forward, the focus would be on how the market reacts after Apple releases its latest models,” said Kevin Chung, analyst at JihSun Securities Investment Consulting.
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