Apple says Trump's tariffs to add $1.1b to its costs

Apple expects to incur an additional US$1.1 billion in costs from tariffs during the September quarter, CEO Tim Cook said on a July 31, earnings call.

The company had already spent around US$800 million on tariffs in the June quarter, mostly due to duties imposed under the International Emergency Economic Powers Act.

Most Apple devices are manufactured in China, India, and Vietnam.

The majority of iPhones sold in the US are produced in India, while most Macs, iPads, and Apple Watches are made in Vietnam.

President Donald Trump’s tariffs have raised expenses across Apple’s product lines, and he has threatened even higher tariffs if Apple doesn’t move some production to the US.

Despite the added costs, Apple reported a 10% rise in quarterly revenue to US$94 billion between April and June. Strong sales of iPhones and Macs helped drive the growth.

🔗 Source: The Verge

🧠 Food for thought

1️⃣ Supply chain diversification emerges as Apple’s primary tariff defense strategy

Apple’s response to escalating tariff costs reveals how major manufacturers are reshaping global production networks to reduce geopolitical risk.

The company has successfully shifted nearly half of its US-bound iPhone production from China to India, demonstrating the scale of manufacturing relocation possible when driven by tariff pressure 1.

This geographic diversification extends beyond iPhones, with most Mac, iPad, and Apple Watch production now occurring in Vietnam rather than China.

Apple’s broader $500 billion commitment to US manufacturing over four years represents one of the largest corporate reshoring investments in recent history 2.

Industry analysis shows Apple plans to relocate 15% to 20% of total production to India and Vietnam specifically to reduce exposure to US-China tariffs 3.

This production shift strategy allows Apple to maintain strong financial performance, reporting $94 billion in quarterly revenue despite facing $1.1 billion in projected tariff costs.