Access the Editor’s Digest for no cost
Roula Khalaf, Editor of the FT, handpicks her favorite stories in this weekly newsletter.
Apple CEO Tim Cook has issued a warning about the impact of Donald Trump’s tariffs, estimating a $900 million increase in costs for the quarter ending in June. This highlights how the tariffs are affecting corporate America.
Cook stated during an analyst call that if the current global tariff rates remain unchanged, the additional costs would amount to $900 million for Apple. However, the unpredictable tariff environment makes it challenging to forecast how these levies will impact the company’s costs beyond June.
These remarks underscore the repercussions of Trump’s tariffs on major US companies. Tech giant Amazon recently added “tariff and trade policies” as a risk factor to its earnings, while McDonald’s mentioned that economic uncertainties are affecting consumer behavior.
Trump’s announcement of reciprocal tariffs on several countries has already had implications. Although smartphones are temporarily exempt from the steep tariffs on China, Apple is still affected by the existing 20% tariff on Chinese imports.
Cook revealed that the majority of iPhones sold in the US in the upcoming quarter will be manufactured in India. Vietnam will supply Mac, Watch, and AirPods products for the US market, while China will continue to handle the majority of product sales outside the US.
Despite the challenges, Apple remains optimistic about iPhone demand and reported strong revenue figures for the first quarter of 2025.
Following the announcement, Apple’s shares experienced a nearly 4% decline in after-hours trading. However, the company’s revenue for the quarter ending March 29 exceeded expectations, with net income also showing growth.
While iPhone revenue saw a modest increase, China revenue experienced a slight decline due to competition from local smartphone manufacturers. On the other hand, Apple’s services business continued to demonstrate robust growth.
Apple’s CFO noted that there was no noticeable surge in consumer demand ahead of the April tariffs, indicating a stable market environment.
In China, Apple saw improved results compared to the previous quarter, with sales remaining steady after adjusting for currency fluctuations.
Additionally, Apple’s board approved a dividend increase and share buyback program, signaling confidence in the company’s performance.