Investing.com -- U.S. President Donald Trump announced sweeping tariffs yesterday, which a Rosenblatt analyst believes “could blow up Apple (NASDAQ: AAPL )."

According to Rosenblatt’s estimates, Apple might incur approximately $39.5 billion in tariff costs due to the high percentage of its products manufactured in China and Vietnam.

With nearly all iPhones sold in the U.S. being produced in China, along with a substantial portion of Macs, iPads, Apple Watches, and AirPods, the tariffs could have a severe effect on Apple’s financials.

Analyst Barton Crockett estimates that if Apple were to absorb these costs, it could see a roughly 32% reduction in both operating profit and earnings per share (EPS) on an annualized basis.

“Apple might want to raise prices to offset this. But we estimate that +/- 40% price hike on devices would be required to fully offset tariff costs. That would likely depress demand. So we’re not sure it’s worth it or workable,” Crockett said in a Thursday note.

The competitive landscape could also change, as Samsung (KS: 005930 ), Apple’s main rival in the U.S., faces a 25% tariff imposed by Trump on South Korean goods. This might give Samsung a competitive edge over Apple.

Beyond the tariffs, there are concerns about potential retaliatory measures from China, such as actions that could disadvantage Apple in favor of local smartphone manufacturers or spark a shift in Chinese consumer preferences away from American products.

Moving iPhone production to the U.S. to mitigate these risks seems economically challenging, with Crockett indicating that such a shift could not occur at scale within the next few years.

He also noted that while Trump has suggested tariff rollbacks in exchange for a TikTok sale agreement, the broader implications of tariffs on consumer prices at major retailers like Walmart (NYSE: WMT ) and Amazon (NASDAQ: AMZN ) remain a concern.

Given these latest developments, Crockett acknowledged that their initial expectations—that Apple would be treated with kid gloves due to its status as an American icon—might not materialize.

“That could still happen. But our thesis and estimates are clearly at risk,” he said.