Should Donald Trump win the forthcoming U.S. Presidential election, he may raise trade tariffs, which may seriously jeopardise Apple's iPhone exports, according to new research from UBS.

A significant 60% tariff on Chinese products to the United States is part of Trump's planned tariffs, which would have an immediate effect on the technology sector.

UBS argues that since 32% of Apple's iPhones and 47% of its PCs are now headed for the U.S. market, the company's supply chain is "more exposed" than that of other suppliers. This is a substantial increase above the company's target of shifting 20% of its production—mostly to India—out of China by 2026.

However, the bank notes that this output also has to serve the iPhone maker's Indian market.

Analysts also note that when Apple tried to combat inflation by raising prices in Europe around the time of the iPhone 14 release, it resulted in a sharp reduction in demand, with iPhone shipments falling by over 20%.

They conclude that Apple's next course of action is unlikely to involve raising prices. Alternatively, they speculate that Apple may choose to bear the cost of the tariffs or pay for the relocation of its manufacturing facilities, which might have an effect on supply chain profitability.

According to UBS, tariffs on key tech items would mostly harm U.S.-based companies that are significantly exposed to the Chinese market. Chinese enterprises would also be impacted because of lower GDP resulting from lower salaries and manufacturing, as well as a shift towards import substitution.

(Sources: investing.com, reuters.com)