Apple faces $900 million tariff costs as production shifts to India

In the United States, during a quarterly earnings call on May 1, 2025, Apple CEO Tim Cook revealed that the ongoing tariffs could significantly increase the company's costs for the quarter. He stated that if current tariffs remain unchanged, they would add approximately $900 million to Apple's expenses. This announcement coincides with Apple’s decision to shift the majority of its iPhone production from China to India, a strategic move to mitigate the impact of U.S. tariffs imposed under the Trump administration, which are stringent on products manufactured in China. Cook pointed out that while Apple has managed to optimize its supply chain and inventory to somewhat limit the impact of tariffs, there remains uncertainty about future tariff changes that could affect the company’s pricing strategy. Cook further mentioned that, despite the tariffs, Apple had reported solid financial performance with revenues rising. The company's revenue grew 5% to $95.4 billion in the first three months of the year, and iPhone sales rose by 2% to reach $46.8 billion. Nonetheless, concerns lingered over the impact of tariffs on the company’s profitability and stock performance. Although the majority of iPhones sold in the U.S. may soon be labeled as made in India, Cook confirmed that most Apple products for international markets will still be manufactured in China. This diversification of the supply chain is a direct response to the risks posed by the tariffs and has been fueled by ongoing competition from local smartphone manufacturers in China. The Trump administration has encouraged Apple to manufacture iPhones domestically, but analysts believe that this transition is highly unrealistic given the current manufacturing landscape and cost structures. Additionally, Cook was asked about the potential for price increases on iPhones. He noted that while the company is actively engaged in tariff discussions and striving to maintain pricing, they cannot guarantee that prices will not rise in the future due to ongoing tariff pressures. If the administration refuses to alter tariff rates, the financial burdens on Apple may lead to price adjustments for consumers, making the impact of the current trade environment on Apple's business model especially crucial to monitor.