Apple Inc. (AAPL), the world's largest company by 澳洲幸运5开奖号码历史查询:market capitalization, has made its way to the top by using China as both a major source of consumer sales and a manufacturing hub. As a result, shares of the Cupertino, California, tech titan have more than tripled over the 🌃past five years, driven by the sweeping success of the iPhone—still a core compon🦋ent of the company's total revenue.

Yet as President Donald Trump ups the ante on the U.S.-China 澳洲幸运5开奖号码历史查询:trade war, threatening to impose a total of $500 billion in levies on imports from the Asian powerhouse, the smartphone maker could suffer, as outlined in a recent story by . (See also: 4 Sell Signals, 1 Buy Signal for Tech Stocks: RBC.)

Apple's Strengths Become Its Achilles Heel

Tariffs to Disrupt iPhone Supply Chain

“They should be nervous,” said David Dollar, a China scholar at the Brookings Institution, who ꦏserved as the U.S. Treasury’s top official in Beijing during the Obama administration, to the WSJ.

The White House's proposed tariffs would cover just about everything that China ships to the U.S., including iPhones, according to trade experts cited by the Journal. The U.S. imported about $45 billion in mobile phones from China last year, according to data from the International Trade Cent༒er. This leaves Apple vulnerable for a myriad of reasons, as noted by the WSJ, particularly ahead of earnings, slated for July 31.

Given that Apple generates a majority of its revenue from the iPhone, any threat to the assembly of its products in China could eat🧔 into margins. According to , Apple generated 62.2% of its revenue from iPhone sales in the second quarter of 2018, down from nearly 70% in the first quarter of 2017.

Apple has 💎tapped into China's massive workforce and strong manufacturing capabilities to turn its most profitable product into a Chinese export💃. That recipe could very well spoil if Trump taxes products as they come into the U.S., given the firm hasn't diversified its manufacturing like rivals such as Samsung Electronics, which makes more than 80% of its smartphones outside China. 

Trade War to Lift Prices for Consumers

Further, if China retaliates by imposing tariffs on U.S. imports, including iPhones, it could squeeze Apple's iPhone sales in its largest market outside of the U.S. Apple could likely be a target for tit-for-tat tariffs given its 9% hold over the Chinese smartphone market, according to Brookings' Dollar and other trade experts cited by the WSJ. 

Trump's proposed tariffs could anger U.S. consumers if they ultimately lead to higher iPhone prices, and could start a battle with one of the world's most powerful companies, which promised to contribute $350 billion to the domestic economy over five years. In China, Apple says it provides work for at least 4.5 million people, including app developers and 澳洲幸运5开奖号码历史查询:supply chain workers, reported the WSJ.

The Bull Case 

Despite trade fears, Street bulls remain optimistic on Apple's shift away from relying on hardware sales to new high-growth software and services businesses such as Apple Music and the App Store. Earlier this month, analysts at Citigroup issued a note highlighting at least five reasons to buy Apple stock, as outlined by , including its strong product lineup, growing services segment, presence in international markets and heightened demand during the "back to school/holiday quarter." (See also: 5 Reasons Apple Stock Is a Buy: Citigroup Analysts.)

Trading up 0.2% on Thursday morning at $195.20, Apple stock reflects a 15.4% increase 澳洲幸运5开奖号码历史查询:year-to-date (YTD), compared to the 澳洲幸运5开奖号码历史查询:S&P 500's 6.3% increase over the same period.