Can you use APFS on an external drive? I believe that the answer to this question is "yes you can but you should not."  Explanation is below.
This is a repost of this article I wrote here:  https://discussions.apple.com/message/32385656#32385656

With High Sierra, there is a serious thing people should know about that Apple does not mention.  In my opinion, you should avoid APFS on external drives.

You cannot make a disk image of an external APFS drive.  Period.  No tool can.  This makes backups of such drives problematic.

Solution:  use Mac OS Extended instead of APFS on external hard drives, until Apple fixes this limitation.

After converting my external SSD drive to APFS I found that it was having errors and wished to reformat it and restore.  I've been using Time Machine regularly and my first hope was to somehow restore from there.  However, that was not possible because once you reformat a drive, you cannot restore to it from Time Machine.  Time Machine will see it as a new volume.  Time Machine is intended for restoring particular folders and files back to a functioning drive and does not help you if your drive completely fails!  I learned a lesson there.
Luckily my drive was not in terrible shape, and I also have another drive so I decided to make a backup image and then just restore from that. That's when things got weird.
I went to SuperDuper! which is my backup image creation tool of choice I've had for years.  It refused to list the APFS drive as a source for backup.  Huh.  You can see in this screen shot that although I have an APFS drive, SuperDuper! just doesn't list it as a source for backups.



OK, so I then turned to Disk Utility.  It greys out the "Image from..."  for APFS disks as you can see here:



Carbon Copy Cloner will let you make a backup from APFS to another drive, but will not create an image of it.  If you do, you will get an error when trying to mount the image during the backup process.  So you have to use the whole target drive as a backup.  I usually use disk images so I can have backups of both my internal and external on one external drive.

So there you go.  Personal opinion:  I believe the best plan is to not use APFS anywhere you don't have to.  I have not seen any improvement with APFS anyhow -- the "fast copy" feature of course only works if you are duplicating a large file on an APFS drive, which is something few people really do often.

Hope this information is helpful to someone.

(note:  Some might notice and be confused that I'm using a drive called "2 TB backup encrypted HD APFS" as my backup source.  I'm writing this after converting my other drive to Mac OS Extended, so for screen shots, I used my backup drive as an example.  The point still holds.  If you don't understand this note, feel free to just ignore it.)