Bernstein tech analyst Toni Sacconaghi is convinced that Apple or Tesla can potentially be collateral damage due to Trump’s executive decision on August 6 of banning WeChat and TikTok.
Sacconaghi stated as no direct measures have yet to be announced, China “has a reputation of broad secrecy in pushing foreign corporations, typically in times of geopolitical tension.” He underlines state-backed client boycotts and government interference of foreign corporations’ exports, sales, or production. Precedents of this particular behavior include the Chinese government’s interference of HP PC sales in 2010, regulative delays on the iPhone 6 back in 2014, the closing of iTunes Movies and iBooks back in 2016, and government closings of Korean supermarkets in 2016. The analyst also stated that China could possibly reintroduce its “Unreliable entity list,” which also included Apple.
The analyst stated that Apple and Tesla are amongst the two most exposed corporations in their coverage. Apple makes 15% of its profit from China. Tesla traditionally made 15%+ of its profit in China, but is now targeting more gains from the recent construction of its Shanghai Giga