An enormous move has shaken the waters of global trade. If anyone’s wondering whether this U.S-China trade war could get any more heated, Donald Trump really has cranked things up to 104%, and no, that’s not a typo. The United States officially imposed a monstrous 104% tariff on Chinese imports on Wednesday. The tariff consisted of a 20% base tariff added on, a 34% increase in April, and a fresh 50% penalty slapped on after China retaliated. This historic action has set in motion what may become one of the most rapid escalations of aggressive trade policy in living memory.

Tariff Tug-of-War

This new expansion comes in the aftermath of two riotous weeks of reciprocal trade actions. On Trump’s “Liberation Day”, the U.S instituted a 34% tariff along with a minimal slate of protectionist measures, including tariffs of 20% on imports from Europe. Within days, China retaliated with its own 34% tariff on U.S goods, accompanied by its own restrictions on the export of rare earth elements of critical importance to technology manufacturing. New threats followed and on April 8, Trump warned that if China did not back off, the tariff would increase to 104%. Beijing did not back off and the tariff went up on April 9.

China’s Ministry of Commerce condemned the act, saying it was “a mistake on top of a mistake,” and that it would “fight to the end.” The question yet to be answered is whether this economic tension would bring on a complete and utter disruption of an already fragile world supply chain.

Apple Stuck in an Unfair Dilemma

One of the most well-known collateral victims of this tariff war is Apple. The tech giant has created ties with Chinese manufacturing, making it very much susceptible to the woes of tariff attacks. Everything shipped from China that bears the brand iPhones, iPads, Mac, or AirPods now bears that full 104% blow. It is truly an impossible margin reality for a company worth $2.5 trillion. Apple’s stock plummeted immediately upon announcement, because investors were concerned about the potential costs and pricing effects. It has started to recover a little, but Apple is becoming more wobbly than it was before in walking this narrow rope.

For the time being, Apple may depend on domestic inventory for some time and will have to intensify its short-term production plans in India and Vietnam. Tim Cook has been talking about diversifying Apple’s supply chain from China for years, but with such disruptions, the output might not be similar to China’s supply chain level. In the long run, it seems like Trump’s goal is to have Apple shift production of iPhones to the United States. However, that would not be a short-term solution under the most optimistic timeline. It certainly would not be a solution that can also be applied for the rest of Trump’s term.

Effects on Consumers

In the event of tariffs, consumers will not feel the impact immediately. Inventory will reduce, and at some time, companies will make tough decisions regarding either absorbing costs or passing them along. That is when consumers will experience the effects at checkout counters and on online platforms. One should be wise to expect price hikes, trimmed profit margins, and maybe even production slowdowns. The approaching crash for the tech industry seems promising if such conditions are on the rise. Apple might ride it out, but even the world’s most valuable company can’t entirely escape the severe storm of 104% tariff.