‍👉 Background: Apple is the world’s most valuable company - from its hardware like iPhone and iPad, to its wearables like the Apple Watch, and of course its software, like iCloud and even Apple TV+. In fact, Apple’s iPhone revenue alone is big enough to rank it above many of the Fortune 500 companies.

‍👉 What happened: Now, Apple lost over $300 billion USD in market value — its biggest one-day drop in history. This was after Trump has announced a 34% tariff on Chinese imports as part of Liberation Day. While Apple loves to say its products are “designed in California,” the assembly happens in China.

‍👉 What else: As a result of this tariff, Apple's share price dropped by more than 9%. While Apple and its investors are currently in the pain cave, the ripple effect might hit consumers and competitors next.

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‍What's the key learning?

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‍💡Tariffs might start as a tax on imports — but they end as a tax on consumers. When tariffs are slapped on imported goods, businesses face higher costs. But typically, businesses don’t just absorb the hit — they raise prices.

💡In 2018 during the U.S.-China trade war, the US imposed tariffs on a broad range of Chinese imports. Studies by the Federal Reserve Bank of New York showed that these tariffs were largely passed on to consumers. They estimated that tariffs imposed by May 2019 were costing the average American household about $415 USD per year.

💡Although the goal for the US is to bring more manufacturing on-shore, US (and global) consumers are expected to feel a lot of pain in the meantime.