Apple already pays 30% duties on several of its products, but tariffs set to go into effect December 15 could force the tech giant to pass extra costs directly to iPhone buyers, according to Wedbush analyst Daniel Ives.

The company’s flagship product is the next target in the trade war as looming 15% tariffs threaten to hike prices for smartphones, laptops, and other electronics produced in China. Apple has already taken the hit for tariffs affecting its AirPods, Watch, and iMac products, but absorbing the duties scheduled for Sunday would have a significant negative impact on its future profits.

Keeping product prices steady after the December 15 tariffs take hold would lower the company’s earnings per share by roughly 4%, or about $0.50, in 2020, Ives wrote Wednesday. 

Passing the tariffs to consumers would also harm Apple’s performance heading into the new decade. The move would increase iPhone prices between $120 and $150, reducing demand by 6% to 8%, Ives told Business Insider in a phone interview.

Apple “more than any company out there has the most to lose if this tariff war does not see a truce,” Ives added.

The analyst expects Apple to absorb the hit and avoid slowing sales momentum ahead of a critical iPhone upgrade cycle. The tech giant is set to unveil its first 5G-capable handsets in fall 2020, offering a major upgrade after its latest update brought moderate improvements to the phones’ cameras, screens, and battery life.

The upcoming lineup is also rumored to resemble the iPhone 4 and its squared-off style, bringing the first major design update since the iPhone X was revealed in November 2017.

About 350 million of the 900 million iPhones in consumers’ hands are due for an upgrade, and harming demand ahead of the reveal would endanger a rare opportunity, Ives said.

“This is a golden window for them, they don’t want to throw a fly in the ointment,” he said in a phone interview.

There’s also a chance Apple wins tariff exemptions from the government, avoiding the price hikes altogether. The company already won waivers for its Mac Pro, but it previously promised to assemble the expensive desktop in the US. CEO Tim Cook has been working hard to curry favor with the Trump administration ahead of the December 15 deadline, recently touring a Texas Apple factorywith the president.

Trump said he was “looking into” whether Apple should be exempt from additional tariffs during the November 20 factory visit.

Apple opened at $270.27 per share Thursday, up roughly 71% year-to-date.

The company has 28 “buy” ratings, 14 “hold” ratings, and seven “sell” ratings from analysts, with a consensus price target of $264.01, according to Bloomberg data.

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