Trump or Biden ?: Apple shares faced difficult times: That means the outcome of the US election for Apple | message
Shares in this article
• Trade policy and competition law important to Apple’s business
• Trade war under US President Trump threatens Apple’s business in China
• Biden’s position on antitrust law may be stricter
Elections will take place in the USA in a few days – and in advance everything points to a victory for challenger Joe Biden. But even if the US Democratic candidate has been in the polls for several weeks before incumbent Donald Trump does not have to mean anything. Surprisingly and contrary to all forecasts, the now 74-year-old Republican also won the presidential election in 2016. For the iPhone manufacturer Apple, however, it might not make much difference who wins the election. Because with a view to the two topics that are likely to affect Apple’s future business the most, the attitude of neither of the two candidates seems to be exclusively positive for the Cupertino company.
US President Trump is likely to continue the trade dispute with China
According to the online magazine “The Street”, which was co-founded by the US stock market expert Jim Cramer, the issues of trade and antitrust law are crucial for Apple and its future growth prospects. Should Donald Trump be re-elected as US President, relations with China, among other things, are likely to remain tense. As “The Street” writes, the trade war between the US and China that Trump started during his tenure was never really ended. Instead, the US President took action against the Chinese company Huawei just a few months ago and also repeatedly accused China – including in the final TV duel with Biden – of being responsible for the spread of COVID-19 – an unhelpful statement for them Improve the relationship between the two countries.
At the beginning of the dispute over Huawei in May, China threatened to initiate countermeasures against Apple, among others, but has not yet carried out this threat. However, if the conflict between the United States and China worsens again in another term of office of Donald Trump, it could hit Apple hard. According to “The Street”, almost half of the US company’s top suppliers come from China, from which Apple would then be cut off in the worst case. The Middle Kingdom is also an extremely important market for Tim Cook’s company. With the new 5G-capable iPhone 12, Apple wants to regain market share there too. A new escalation of the trade dispute could undo this plan.
Should Joe Biden win the battle for the office of US president, “The Street” expects that he would not act as aggressively against China as Trump did, for example, by imposing punitive tariffs. Even if the relationship between the two nations remains tense, the Democrats are likely to handle the whole case in a way that would be more positive for Apple, writes the online magazine. Stock exchange expert Jim Cramer goes one step further in his program “Mad Money” on “CNBC”. He believes that a Biden victory would end the trade war with China. In this case, Apple shares are one of the biggest winners, according to Cramer.
Biden victory could endanger Apple’s market position
But a win by Joe Biden and the US Democrats should not only have positive effects for Apple. According to “StockNews”, both parties in the US Congress have already expressed concerns that the big US tech companies are too big and have expressed calls for more regulations or even a break-up of the tech giants. The US Department of Justice started the fight against Big Tech under US President Trump with an antitrust case against Alphabet. It is possible that there could also be proceedings against Apple for violations of competition law – both under Trump and under Biden.
According to “The Street”, the US Democrats are likely to take stricter action against antitrust violations than the more business-friendly Republicans – even if, according to the news site, this topic has not yet been on Biden’s top priority list. This is also indicated by statements by the Democratic MP and chairman of the antitrust law committee, David Cicilline, who, according to “Politico”, expressed the assumption that a democratic government would combat the market concentration of the tech giants during a fundraising campaign for Joe Biden and Vice President-elect Kamala Harris. StockNews also says that an overwhelming Democratic victory in both houses of Congress would create a very restrictive environment for tech companies.
The antitrust authorities are then likely to take action against Apple primarily based on the guidelines in the App Store. Developers who want to offer their programs for the iPhone or iPad can only do so via Apple’s App Store. There, however, a fee of 30 percent of the purchase price is due for all transactions – including in-app purchases. Fortnite developer Epic Games recently complained about this practice. Should Apple’s actions in the App Store be found to be inadmissible in antitrust proceedings, this would have serious effects on the business model of the US group. Because the service division, which also includes the App Store, was recently responsible for a good 20 percent of the iPhone manufacturer’s sales. Should a large part of the business collapse here, Apple shares should also go downhill.
Finanzen.net editorial team
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