If President-elect Donald Trump follows through on his campaign rhetoric and rips up trade agreements with nations such as China and Mexico, the impact would ripple through tech hardware companies and suppliers.
Apple (AAPL) would among the high-profile names to take a hit though a number of other electronics manufacturing services companies such as Jabil Circuit (JBL) , Flex (FLEX) and Plexus (PLXS) . The company generates about 24% of its revenues from China, according to Deutsche Bank estimates, while FactSet puts its China revenue exposure at about 21%.
The company could face bigger problems at home, however. The U.S. remains Apple's top market, representing 35% of sales according to FactSet. In the event of a trade war, Deutsche Bank analyst Sherri Scribner suggests in a Tuesday report, tariffs on Chinese-made goods could present a significant challenge.
"Apple relies heavily on the Asian supply chain to produce its almost 300M units of products each year," Scribner wrote. "One of Apple's most important suppliers is Chinese-based Foxconn, who derives more than 50% of its sales from Apple products." Apple did not respond to a request for comment.
China has been a focal point for Trump's trade policy.
"Trump has railed against the Chinese as being unfair trading partners, at one point even proposing a 45% tariff on all goods coming from China, and there are fears he could spark a trade war," said Jim Cramer and Jack Mohr, the manager and research director for the Action Alerts PLUS portfolio, which owns AAPL.
Cramer and Mohr discounted the likelihood of a tariff war, though. "We think Trump just wants a better peace, and putting the world's largest company, which was U.S.A.-made and remains forever aligned with the country's innovation, would be a major mistake," they said.
China trade policy would affect a broad swath of tech and electronics companies.