Microsoft Dethrones Apple as World's Most Valuable Company
In a dramatic escalation of trade tensions, President Donald Trump imposed a 104% tariff on Chinese imports Wednesday, triggering immediate global market ripples and prompting a swift 84% retaliatory tariff from China on American goods. The move has sent shockwaves through Wall Street, with Apple Inc. at the epicenter.
Over the past four trading days, Apple’s market value has collapsed by 23%, erasing more than $700 billion in shareholder wealth. This sharp decline knocked Apple off its long-held perch as the world’s most valuable company, ceding the top spot to Microsoft. As of the latest data, Apple is now valued at $2.59 trillion, trailing Microsoft’s $2.635 trillion.
The primary concern: Apple’s deep reliance on Chinese manufacturing. CNBC reports that approximately 90% of iPhones are assembled in China, making the company particularly vulnerable to steep import tariffs. Morgan Stanley estimates that these new trade measures could cost Apple $34 billion annually. That cost may ultimately be passed down to consumers, potentially triggering a wave of price hikes across Apple’s product line.
The mere possibility of rising prices has already sparked a surge in demand. Over the weekend, Apple stores saw increased foot traffic as consumers rushed to buy iPhones ahead of anticipated price increases, according to Bloomberg. “Everyone is here because of the fear,” one employee reportedly said.
While the Trump administration argues the tariffs are aimed at reviving U.S. manufacturing and addressing a record $1.2 trillion trade deficit, the practical realities for tech companies like Apple are far more complex. Building iPhones domestically isn’t a realistic short-term solution. Wedbush analyst Dan Ives estimates it would cost Apple $30 billion and at least three years to bring even 10% of its supply chain to the U.S. That could push the price of a domestically manufactured iPhone as high as $3,500—nearly triple the current price of the iPhone 16 Pro Max.
Despite the market chaos, Trump remains optimistic. At a White House event this week, he claimed the tariffs are generating $2 billion per day in revenue for the U.S. Treasury. The Tax Foundation projected that over the next decade, Trump’s tariff strategy could bring in up to $2.852 trillion.
But that revenue comes at a cost. According to a study from the Yale Budget Lab, the average American household could lose $3,800 in purchasing power due to rising consumer prices. Matt Schulz, chief consumer finance analyst at LendingTree, echoed this concern, warning that tariffs are “likely to push prices higher across the board.”
For now, Apple has remained silent on whether it will raise prices. Analysts expect the company to feel the full impact of the tariffs in its fourth quarter starting in July, once its current inventory—already imported before the tariffs—runs out.
This high-stakes trade showdown marks a pivotal moment in the global economy, with Apple caught in the crossfire. Investors, consumers, and policymakers alike will be watching closely as the fallout unfolds.
