Apple Inc. experienced a significant stock price increase following the announcement of a temporary reduction in tariffs between the United States and China. The two nations agreed to lower reciprocal tariffs from 125% to 10% for a 90-day period, aiming to ease trade tensions and foster further negotiations. ([axios.com](https://www.axios.com/2025/05/12/us-china-tariffs-trade-deal-trump?utm_source=openai))
This development has been particularly beneficial for Apple, as the company heavily relies on Chinese manufacturing for its products, including the iPhone, which constitutes a substantial portion of its revenue. The previous high tariffs had imposed significant costs on Apple, with CEO Tim Cook estimating an additional $900 million in expenses for the June quarter alone. ([reuters.com](https://www.reuters.com/business/apple-considers-raising-iphone-prices-wsj-reports-2025-05-12/?utm_source=openai))
In response to the tariff relief, Apple’s stock opened at over $211, up from its previous close of $198.53, marking an increase of nearly 6%. The stock has since stabilized around $207, reflecting a 5% gain.
Despite the positive market reaction, the tariff reduction is temporary, set to expire in 90 days. This uncertainty has led Apple to consider raising prices for its upcoming iPhone lineup to offset potential future tariff impacts. Reports suggest that the company may introduce new features and an ultra-thin design to justify a higher price point, potentially increasing the entry price by up to 43%. ([reuters.com](https://www.reuters.com/business/apple-considers-raising-iphone-prices-wsj-reports-2025-05-12/?utm_source=openai))
The broader market also responded favorably to the tariff reduction news. The S&P 500 surged 2.7%, the Dow Jones rose by 981 points (2.4%), and the Nasdaq increased by 3.7%. Companies heavily reliant on U.S.-China trade, such as semiconductor and retail firms, saw significant stock gains. ([apnews.com](https://apnews.com/article/62fbd84396aaea011c68231363b283de?utm_source=openai))
While the current tariff reduction provides temporary relief, the situation remains fluid. Apple and other companies continue to monitor trade negotiations closely, as future developments could significantly impact manufacturing costs and pricing strategies.
