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 said it was shifting production of iPhones bound for the American market away from China, which is facing the highest duties. The majority of iPhones sold in the US in coming months will be made in India, Apple said. For now, the turmoil has left Apple's sales unscathed. The company said revenues for the first three months of the year rose 5% from the same period last year, to $95.4 billion. Amazon, another tech giant whose results were being closely watched for signs of tariff damage, likewise said sales were holding up, rising 8% year-on-year in its North America e-commerce business in the most recent quarter. It forecast similar growth in the months ahead. "Obviously no one of us knows exactly where tariffs will settle or when," said Amazon boss Andy Jassy, while noting that the firm has emerged from periods of disruption – like the pandemic – stronger than before. "We're often able to weather challenging conditions better than others," he said. "I'm optimistic this could happen again." Apple shares had plummeted after Trump announced his administration would levy "reciprocal tariffs" on products imported to the United States, with the aim of persuading companies to manufacture more in the US. Trump has said he hopes Apple products in particular will be made in the country. But the administration has faced significant pressure to moderate its plans. Shortly after the tariffs went into effect, it announced that certain electronics, including phones and computers, would be exempted. On a call with investors to discuss the firm's quarterly performance, Apple boss Tim Cook seemed keen to draw attention to Apple's investments in the US, opening with a reminder of its plans to invest $500bn across multiple states over the next four years. But though Apple is already shifting its supply chain for US-bound products away from China, it is India and Vietnam that are poised to be the largest beneficiaries, not the US. Mr Cook said the company expected to make the majority of iPhones destined for the US in India by the end of June, and move production of almost all iPads, Macs, Apple Watches and Airpods to Vietnam. "We do expect the majority of iPhones sold in US will have India as their country of origin," Mr Cook said, referring to the next three months of trading. He said Vietnam would be the country of origin "for almost all iPad, Mac, Apple Watch and AirPods product sold in the US". China will remain the country of origin for the vast majority of total products sold outside the US, he added. Nevertheless, the shift of the iPhone supply chain to India was "impressive" according to Patrick Moorhead, chief executive of Moor Insights & Strategy. "This is a marked change from what [Cook] said a few years back when he said that only China can build iPhones," Mr Moorhead said. "There is lots of progress that Apple must show here but it's a pretty good start," he said. Amazon is also repositioning itself to increase resilience in the face of the tariffs. The company said it working to make sure it had a diversity of sellers and Mr Jassy said he felt the firm was well-positioned for the months ahead, pointing to the firm's scale and its role supplying everyday essentials. For now, it said sales had not been hurt by the tariff turmoil. If anything, executives said the business may have benefited from some customers starting to stockpile. Overall sales jumped 9% to $155.7bn in the first three months of 2025, compared with the same period last year, while profits surged more than 60% year-on-year to roughly $17bn.
Apple braces for $900m blow from Trump tariffs
TruthLens AI Suggested Headline:
"Apple Anticipates $900 Million Cost Increase Due to Trump Tariffs"
Bbc News
7.5
TruthLens AI Summary
Apple is facing an estimated additional cost of nearly $900 million this quarter due to tariffs imposed on imported goods by the Trump administration. This situation arises despite the fact that certain key electronics, including iPhones, were spared from the new import taxes. The tariffs have caused significant disruptions in global supply chains, leading to uncertainty about consumer demand. In response to these challenges, Apple has announced a strategic shift in its production processes. The company plans to move the majority of iPhones destined for the American market from China, where tariffs are highest, to India. By the end of June, Apple expects that most iPhones sold in the U.S. will be manufactured in India, while production of iPads, Macs, Apple Watches, and AirPods will be relocated to Vietnam. This move marks a significant change in Apple's supply chain strategy and reflects the company's efforts to mitigate the financial impact of the tariffs.
Despite the tariff-related turmoil, Apple has reported a 5% increase in revenues, totaling $95.4 billion for the first quarter of the year compared to the same period last year. Similarly, Amazon, another major player in the tech industry, has experienced an 8% rise in sales within its North American e-commerce sector. Amazon's CEO, Andy Jassy, expressed optimism about the company's resilience amidst the ongoing disruption. He highlighted that the firm has historically emerged stronger from challenging conditions, including the pandemic. Both companies are taking proactive steps to navigate the uncertainties created by the tariffs, with Apple emphasizing its commitment to investing $500 billion in the U.S. over the next four years while also acknowledging that the majority of their production will now occur outside the United States. Analysts have noted this shift as a significant development in Apple's operations, indicating a departure from previous reliance on Chinese manufacturing for its products.
TruthLens AI Analysis
The article highlights the significant financial implications of the Trump administration's tariffs on Apple, a leading technology company. It emphasizes how these tariffs could result in a $900 million increase in costs for Apple, even though certain electronics have been exempted. The piece indicates Apple's strategic response to the tariffs by shifting iPhone production from China to India, while also noting that the company's sales remain robust despite the tariff environment.
Implications of Tariffs on Business Operations
The article suggests that Apple's cost structure is being heavily impacted by trade policies, altering its supply chain significantly. By relocating iPhone production to India, Apple is attempting to mitigate the financial blow from tariffs on goods imported from China. This move could signify a broader trend among tech companies to diversify manufacturing bases in response to geopolitical pressures.
Market Reactions and Financial Performance
Despite the looming tariff costs, Apple's financial performance appears stable, with a reported revenue increase of 5%. This resilience may create a perception that the company can withstand external pressures better than others in the market. Comparisons with Amazon, which also reported positive sales growth, reinforce a narrative of strength among major tech firms amidst uncertainty.
Perceptions of Leadership and Economic Strategy
Statements from executives like Amazon's Andy Jassy convey a sense of optimism regarding navigating disruptive economic conditions. This sentiment may aim to instill confidence among investors and consumers, suggesting that these companies are well-positioned to manage challenges, including tariffs. The article indirectly portrays both Apple and Amazon as resilient leaders in the tech sector.
Potential Manipulative Elements
The framing of the article may lead readers to focus on Apple's proactive measures while downplaying the broader economic consequences of the tariffs. The language used suggests optimism and strength, possibly diverting attention from potential negative impacts on consumers, such as increased prices or reduced product availability.
Overall Trustworthiness of the Article
The article appears to present factual information regarding the financial implications of tariffs on Apple and includes direct quotes from company executives. However, the selective emphasis on positive outcomes could alter the reader’s perception. While it is grounded in reality, it may also serve to create a narrative that benefits the tech industry by projecting stability and resilience.