Mizuho’s Klein on Trump/Apple: ’Tim Cook has no great outcomes here’

Investing.com -- In a note to clients on Friday, Mizuho TMT specialist Jordan Klein warned that escalating rhetoric from President Donald Trump targeting Apple (NASDAQ:AAPL) could spell trouble for the tech giant as it navigates global production shifts.

“Tim Cook has no great outcomes here,” Klein wrote, following Trump’s social media threats to impose a 25% tariff on iPhones not made in the United States. 

The president’s comments came after reports that Apple plans to shift more iPhone production to India to avoid existing China tariffs.

Trump’s reaction, Klein said, signals a “tit for tat brewing between AAPL and DJT,” adding that many traders may now “lever up on the AAPL short” amid growing political pressure. 

“DJT will continue his public tantrum of stomping and yelling to pressure AAPL publicly to invest in US assembly.”

Apple had previously warned that global tariffs could cost the company $900 million, a manageable hit relative to its scale. 

However, Klein sees a difficult path ahead. “Even if AAPL had a lot of final assembly in the US, they would face the high cost of shipping in all the key parts and components… that are all manufactured in Asia.”

Klein argued that large-scale iPhone assembly in the U.S. is “not feasible or likely to happen for many reasons,” citing supply chain complexity and labor costs. 

“It is cost prohibitive and totally inefficient,” he wrote. “Consumers [would be] paying 30-40% more per iPhone for a ‘made in the USA’ product. Hell no! He [Trump] would lose the midterms next year massively if all the costs passed on to consumers.”

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Klein concluded that Cook may need to offer Trump “some sort of carrot” to ease tensions, possibly involving more U.S.-based component production.

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