U.S. President Donald Trump’s limited trade deal with China removes a major hurdle for Apple and other technology stocks that have already surged this year to record highs.
On Friday, the US and China reached a phase-one trade deal that includes some relief from tariffs, such as doing away with a tax set to go into effect on Sunday, where the shares of Apple rose as much as 1.3% on Friday to a new high.
Apple would've been hit by the proposed tariffs, which would've added 15% to prices Sunday that would have hit $160 billion in Chinese consumer goods just weeks before Christmas, including $115 billion worth of iPhones, laptops and other electronics.
China has agreed to boost imports of U.S. energy, pharmaceutical and agricultural products, although Chinese officials offered no details on the amount of U.S. goods Beijing had agreed to buy.
If it is signed, Trump’s long-awaited deal will be a relief to Apple, among the U.S. companies with the most to lose in the trade war between the world’s two largest economies, along with chipmakers who make the components in its devices, which are mostly made in China.
Apple had been pushing back against the proposed tariffs. In November, the company filed requests to be excluded from the round, according to Bloomberg. Even President Donald Trump said during a visit to an Apple facility in Texas that he was looking into whether Apple should be exempt from the tax.
Most of Apple's supply chain is in China, including an iPhone assembly plant in Zhengzhou that is responsible for producing half of the iPhones in the world.
If the increase in Apple's stock price holds through the end of trading Friday, it will mark a four-day streak of gains for the company. Earlier in the week, Apple was unseated as the world's most valuable public company when its roughly $1.2 trillion market valuation was beaten by Saudi Aramco's market capitalization of more than $2 trillion.
Apple’s stock has also benefited from progress increasing its services revenue as it diversifies from declining iPhone sales. “Markets are clearly seeing through this year’s flat S&P earnings and expect much better results in 2020,” Nicholas Colas, co-founder of DataTrek, wrote in a note.
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