In a stark warning to the tech industry, Apple has estimated that President Donald Trump's tariff policies will add nearly $900 million to its costs this quarter. The company revealed that although certain electronic goods benefitted from exemptions from the new import taxes, the overall disruption from Trump's tariff strategy continues to threaten supply chains and consumer demand. In response, Apple disclosed plans to transition its production of iPhones destined for the U.S. market primarily to India, moving away from its historically dominant manufacturing base in China, which is subject to the highest duties.
Despite these looming financial impacts, Apple’s sales figures have remained surprisingly stable. The company reported a 5% increase in revenues, totaling $95.4 billion for the first three months of the year compared to the same time last year. Amazon, another tech powerhouse, echoed this sentiment, showing an 8% rise year-on-year in its North American e-commerce business, further reinforcing that major firms are navigating the uncertain landscape of tariffs effectively.
Following tariffs that sparked a significant drop in Apple’s shares initially, the administration indicated a desire for Apple and other tech firms to bring more production back to the U.S. However, these hopes may not materialize as projected. Tim Cook, Apple’s CEO, announced a commitment to invest $500 billion across various states while also confirming the strategic shift of most iPhones to India by the end of June and virtually all iPads, Macs, Apple Watches, and AirPods to Vietnam.
Analysts have noted that this move represents a significant pivot for Apple, which has traditionally relied on Chinese manufacturing. Patrick Moorhead, CEO of Moor Insights & Strategy, regarded this shift as a notable accomplishment as it contrasts Cook’s previous statements on iPhone manufacturing capabilities.
Amazon's response to tariff pressures includes diversifying its seller base and reinforcing its resilience amid changing market dynamics. Currently, the retail giant anticipates continued growth, crediting increased consumer stockpiling behavior due to tariff anxieties. With first-quarter sales soaring 9% to $155.7 billion and profits exceeding $17 billion, Amazon appears well-prepared, paralleling Apple’s adaptations in the face of economic turbulence.
