Why AAPL Is Sliding Today

Apple (AAPL) is falling 4% after President Donald Trump imposed a 10% tariff on goods from China. A portion of AAPL’s iPhones are manufactured in the Asian country.

However, in a note to investors,  Bank of America suggested that AAPL would have a relatively easy time dealing with Trump’s move.

A wide view of an Apple store, showing the range of products the company offers.

Bank of America’s Take on How Tariffs Could Impact AAPL

Reporting that “most iPhone models can now be manufactured in India,” Bank of America believes that 80% of all iPhones sold in the U.S. can be made outside of China. Moreover, AAPL can also start manufacturing more of its other products in India.

As a result of these points, the bank estimates that the tariff would only lower Apple’s earnings per share by 5 cents if the tech giant does not change its iPhone prices in America.

However, AAPL can entirely negate this impact by increasing iPhone prices in the U.S. by 3%, Bank of America believes.

The bank kept a $265 price target and Buy rating on AAPL.

Could China’s Potential Retaliation Affect AAPL?

Apple sells many iPhones in China, and the demand for the device has been reportedly dropping sharply in the Asian country in recent quarters.

According to one research firm, AAPL’s iPhone sales in China last quarter sank 18% versus the same period a year earlier. If China places tariffs on the devices, iPhone sales in the country could fall much further.

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READ ALSO 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock

Disclosure: None. This article is originally published at Insider Monkey.