Apple CEO Tim Cook said on Thursday that President Donald Trump’s sweeping tariffs could cost the company an extra $900 million this quarter. “Assuming the current global tariff rates, policies, and applications do not change for the balance of the quarter and no new tariffs are added, we estimate the impact to add $900 million to our costs,” he told a quarterly earnings call. Cook also announced that Apple would be shifting the production of iPhones for the U.S. market from China to India.
About 90% of Apple’s production of the iPhone, its most profitable product, has remained in China, despite efforts to increase manufacturing elsewhere, according to financial services firm Wedbush Securities. While smartphones and other electronic devices containing semiconductors are exempt from “reciprocal” tariffs on China, products made in China still face a minimum 20% levy, according to Cook. While some iPhone manufacturing has already moved to India, Cook expects that “the majority of iPhones sold in the US will soon have India as their country of origin.”
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This announcement indicated the impact of tariffs on tech companies, in spite of the exemptions. Apple’s stock fell nearly 4% in after-hours trading following the earnings call, reflecting investor concerns about the uncertain outlook posed by tariffs and supply chain instability.
“We have a complex supply chain. There’s always risk in the supply chain,” Cook said. “What we learned some time ago was that having everything in one location had too much risk with it.” He also added that China would continue to be the location of production for most iPhones meant for non-US markets. iPads, Apple Watches, and AirPods sold in the U.S., on the other hand would be produced in Vietnam.
Despite the uncertainty around tariffs, Apple reported solid finances in the January to March quarter. Revenue rose 5% in the first three months of the year to $95.4 billion, compared to the same period in 2024, beating analysts’ expectations. Revenue for iPhones climbed 2% to $46.8 billion.