Apple Faces $900M Tariff Hit, Shifts iPhone Production to India

Apple Inc. (NASDAQ: AAPL) expects U.S. tariffs imposed by President Donald Trump to add $900 million in costs this quarter, CEO Tim Cook revealed during the company’s earnings call on Thursday. The announcement led to a 3.8% drop in Apple shares in after-hours trading, pushing them to $205.10.

While the iPhone maker reported better-than-expected earnings for the March quarter—boosted by stronger iPhone sales—revenue from its high-margin services division missed estimates. Cook noted that the tariffs had only a limited impact last quarter but warned of higher costs going forward if trade policies remain unchanged.

In response to the trade tensions, Apple is accelerating a major shift in its global supply chain. Cook stated that the majority of iPhones sold in the U.S. will soon be manufactured in India, reducing reliance on China. He also said almost all iPads, Macs, Apple Watches, and AirPods sold in the U.S. will be produced in Vietnam. However, China will remain the primary manufacturing base for Apple products sold outside the U.S.

Trump’s recent 145% tariff hike on Chinese goods—though currently sparing electronics—has increased uncertainty for tech firms heavily dependent on Chinese manufacturing. Washington has signaled plans to extend tariffs to electronics in the coming weeks.

Apple, which builds around 90% of its devices in China, has reportedly rushed shipments from India to the U.S. to dodge the latest tariff hikes. Cook emphasized that the $900 million cost estimate assumes no further tariff changes this quarter.

With geopolitical risks rising, Apple’s aggressive supply chain diversification could help it navigate growing trade barriers while protecting margins and maintaining U.S. market access.