Apple shares rose over 2% in after-hours trading after CEO Tim Cook joined Donald Trump for a series of announcements. Trump revealed plans for 100% tariffs on chips and semiconductors, which are expected to significantly impact the tech industry.

Apple’s Strategy in Response to Tariffs

In response to these developments, Cook stated that Apple will keep its product manufacturing outside the United States for the foreseeable future. This indicates a strategic move to handle the new tariff situation. Despite the tariff news, Apple shares increased, showing a disconnect between immediate reactions and deeper risks. The announcement of these tariffs creates a lot of uncertainty for the tech supply chain, suggesting market volatility is underestimated. We should prepare for larger price fluctuations ahead. Traders might consider purchasing protection against a market drop. The CBOE Volatility Index (VIX), which tracks expected market volatility, closed near 15, a low level considering the seriousness of this news. Buying VIX call options or related products could be a way to profit from the expected turbulence in the weeks ahead. The semiconductor sector is likely to face significant challenges. We are looking at buying put options on semiconductor ETFs, like the VanEck Semiconductor ETF (SMH), to short this sector directly. Historically, during trade disputes in 2018 and 2019, chip stocks struggled whenever tariffs were announced, and we expect this trend to continue.

How This Might Affect Consumers and Market Strategy

For Apple (AAPL), the situation is tricky given Cook’s statement about keeping manufacturing abroad. This raises concerns about potential conflicts or covert deals, making it hard to predict the stock’s movement. A long straddle strategy, which involves buying both a call and a put option, may be a smart move to take advantage of the likely significant change in stock price. If these tariffs are put in place, they will almost certainly lead to higher inflation, driving up the cost of most electronics. The latest Consumer Price Index (CPI) data from July 2025 indicated an annual inflation rate of 3.4%, and these tariffs will likely add more upward pressure. Therefore, we are cautious about consumer discretionary stocks, as higher tech prices could reduce spending in other areas. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now