Apple may suffer a major setback as US President Donald Trump has announced the implementation of new tariffs, which will directly affect foreign production hubs. Because more than 90% of Apple’s manufacturing occurs in China, this new trade policy can prove to be challenging for the company. Under the new tariff structure, imported products from China will incur 34% additional fee, which will be in addition to 20% already existing tariffs. In addition, 26% tariffs will be imposed on products imported from India. These fees, which are implemented from April 9, can increase the cost of Apple and it can affect the company’s profits.

If Apple does not get exemption from these tariffs and the company itself bears additional cost, then the CITI estimates (Via NDTV ProfitAccording to) Apple’s gross margin may fall by up to 9%. This may directly affect iPhone prices and the company’s total profits. The tariff of 26% will have a relatively low impact on the production in India, but still it is possible to fall by up to 0.5% in gross margin.

At the moment, there is uncertainty about the fact that Apple will raise prices by putting this extra cost on customers or will bear the cost itself.

After the announcement of the new tariff, Apple shares on Wednesday 5.6% Fall Was done. The company’s shares fell by $ 211.32 in trading after the US market shut down, while it was at $ 223.89 while closing the market. This year, Apple’s shares have fallen by up to 11% so far. However, the company has been trying to reduce its dependence on China for some time, but still a large part of its manufacturing occurs in China.

The US has imposed heavy tariffs not only on China and India, but also many other countries. Cambodia has been charged 49%, Thailand 36%, Japan 24%, South Korea 25%, Switzerland 31%, and Vietnam 46%tariff. Even some associate countries of America such as Israel (17%) and Britain (10%) are not exempted from tariffs. The European union will also face 20% fee.