Jefferies says Apple margin hit may be nearly 7% if not exempt from China tariff

Jefferies notes that Apple (AAPL) was exempted from import tariffs in Trump’s last presidency and since then the company has proactively diversified its production away from China. However, so far only about 10% of iPhone production is made outside China. While noting that it is possible Apple will get an exemption again, the firm says that if that is not the case, its analysis indicates gross margin could potentially be impacted by 3%-6.7% and its value by about 5% to 10%, assuming no average selling price or volume change. Jefferies has a Hold rating on Apple shares.