Apple Shares Plunge 3% Real Concerns
Apple has experienced a massive one-day share price drop of 3% as the Californian based company continues to be caught between escalating US-China trade tensions more than likely a result the Hong Kong Human Rights and Democracy Act.
US President Donald Trump has signed legislation to support human rights in Hong Kong, resulting in an aggressive response from the democratic republic of China, and a massive one day drop in Apple share prices.
In response to the legislation, China has warned the US it ‘will take further steps if necessary to uphold Hong Kong’s stability and prosperity and China’s sovereignty’.
‘We urge the US to correct the mistakes and stop interfering in our internal affairs,’ said Chinese Foreign Ministry spokeswoman Hua Chunying said at a press conference in Beijing.
‘We advise the US not to act incautiously; otherwise, China will be required to counteract resolutely, and all the consequences created by this will have to be borne by the US side’.
The fear is the bill may bring further strain to Western tech companies caught between the US-China trade war, as exemplified by Apple’s biggest loss since June.
In signing the bill, Donald Trump expressed solidarity for Hong Kong, but mentioned he was also ‘standing with President Xi,’ stating that the legislation ‘doesn’t make it better, but we’ll see what happens’.
‘He’s a friend of mine. He’s an incredible guy.’
Following the signing of the bill into law a celebration was held by protestors rallying support for Washington and Donald Trump, with one celebrating protestor a recipient of John McCain Prize for Leadership.
‘I know that many people in Hong Kong are happy that the US Government has passed a new bill,’ said Figo Chan, the 23-year-old protestor honoured at the Halifax International Security Forum in Canada.
‘I hope that citizens of many different countries can in their own way fight for democracy’.
Unfortunately for Apple, the fight for democracy tied with the effects of the bill have resulted in Apple’s most significant one-day loss in several months.
As reported by Bloomberg, Apple shares dropped by 3%, the most significant loss since 23 August, despite growing by 50% since its lows in June.
According to Wedbush analyst Daniel Ives, the crossfire continues to strike Apple ‘more than any other company out there,’ leading to the suggestion it may have a spin-off effect in US economy.
Apple’s Foxconn factory in China ‘represents the hearts and lungs of the Cupertino iPhone franchise globally’.
The company has the most to lose if the tariff war is not settled going forward, according to Ives.
However, Apple may also be facing further pressure in the east from Russia, with President Vladimir Putin signing new legislation requiring device manufacturers to pre-install Russian software on all smartphones, computers, and smart TVs sold in the country.
The bill has been implemented to allow Russian developers to compete with western tech firms more effectively.
In response, an Apple source told the Kommersant business daily, ‘a mandate to add third-party applications to Apple’s ecosystem would be equivalent to jailbreaking.
‘It would pose a security threat, and the company cannot tolerate that kind of risk’.