Apple reports that tariffs from the Trump administration will significantly impact its costs, but the company continues to thrive amid ongoing changes in consumer behavior and supply chain logistics.
Apple braces for $900 million blow from Trump tariffs, adjusting strategy to minimize costs.
Tariffs on goods coming into the US will add nearly a billion dollars to Apple's costs this quarter, the tech giant has said, despite President Donald Trump's decision to spare key electronics from the new import taxes. The estimate from the iPhone maker comes as firms are scrambling to respond to Trump's tariff strategy, which is disrupting supply chains and raising uncertainty about consumer demand. Apple stated that it would shift production of iPhones destined for the American market away from China, which currently faces the highest duties. The majority of iPhones expected to be sold in the US in the coming months will be made in India, according to Apple.
Despite the turmoil of tariffs, Apple's sales have remained largely unscathed. The company reported a 5% increase in revenue for the first three months of the year, totaling $95.4 billion. Another tech giant, Amazon, has also revealed that its North America e-commerce business sales rose by 8% year-on-year in the latest quarter, forecasting similar growth ahead. Amazon CEO Andy Jassy reflected on the uncertainty of tariffs, recognizing that while their impact is unpredictable, the company has historically emerged stronger from disruptive periods.
Apple shares experienced a downturn following Trump's announcement regarding "reciprocal tariffs" on imported goods, aiming to encourage domestic manufacturing. Despite this, key electronics, such as phones and computers, were later exempted from these tariffs. During a call with investors, Apple CEO Tim Cook highlighted the company’s commitment to investing $500 billion across various states in the US within the next four years. However, Cook noted that production of iPhones and other products will primarily occur in India and Vietnam rather than the US. Apple anticipates that by the end of June, most iPhones sold in the US will originate from India, while almost all iPads, Macs, Apple Watches, and AirPods will be made in Vietnam, stating China will still be the main producer for most products sold outside the US.
Industry analysts have recognized the significance of Apple's shift in production strategy. Patrick Moorhead, CEO of Moor Insights & Strategy, remarked on the impressive nature of this change, contrasting it with Cook’s previous comments emphasizing China's sole capacity to build iPhones. Although challenges remain, he considered this a positive first step. Meanwhile, Amazon is also diversifying its seller networks in response to the tariffs, ensuring continued resilience. Although sales have not been adversely affected by the tariff chaos, some customers appear to be stockpiling products, contributing to a sales jump of 9% to $155.7 billion in the first three months of 2025, with a more than 60% increase in profits year-on-year, reaching approximately $17 billion.
Apple braces for $900 million blow from Trump tariffs, adjusting strategy to minimize costs.
Tariffs on goods coming into the US will add nearly a billion dollars to Apple's costs this quarter, the tech giant has said, despite President Donald Trump's decision to spare key electronics from the new import taxes. The estimate from the iPhone maker comes as firms are scrambling to respond to Trump's tariff strategy, which is disrupting supply chains and raising uncertainty about consumer demand. Apple stated that it would shift production of iPhones destined for the American market away from China, which currently faces the highest duties. The majority of iPhones expected to be sold in the US in the coming months will be made in India, according to Apple.
Despite the turmoil of tariffs, Apple's sales have remained largely unscathed. The company reported a 5% increase in revenue for the first three months of the year, totaling $95.4 billion. Another tech giant, Amazon, has also revealed that its North America e-commerce business sales rose by 8% year-on-year in the latest quarter, forecasting similar growth ahead. Amazon CEO Andy Jassy reflected on the uncertainty of tariffs, recognizing that while their impact is unpredictable, the company has historically emerged stronger from disruptive periods.
Apple shares experienced a downturn following Trump's announcement regarding "reciprocal tariffs" on imported goods, aiming to encourage domestic manufacturing. Despite this, key electronics, such as phones and computers, were later exempted from these tariffs. During a call with investors, Apple CEO Tim Cook highlighted the company’s commitment to investing $500 billion across various states in the US within the next four years. However, Cook noted that production of iPhones and other products will primarily occur in India and Vietnam rather than the US. Apple anticipates that by the end of June, most iPhones sold in the US will originate from India, while almost all iPads, Macs, Apple Watches, and AirPods will be made in Vietnam, stating China will still be the main producer for most products sold outside the US.
Industry analysts have recognized the significance of Apple's shift in production strategy. Patrick Moorhead, CEO of Moor Insights & Strategy, remarked on the impressive nature of this change, contrasting it with Cook’s previous comments emphasizing China's sole capacity to build iPhones. Although challenges remain, he considered this a positive first step. Meanwhile, Amazon is also diversifying its seller networks in response to the tariffs, ensuring continued resilience. Although sales have not been adversely affected by the tariff chaos, some customers appear to be stockpiling products, contributing to a sales jump of 9% to $155.7 billion in the first three months of 2025, with a more than 60% increase in profits year-on-year, reaching approximately $17 billion.
