Apple Faces Margin Pressure Amid Trump’s China and India Tariffs

Apple Inc. (NASDAQ: AAPL) is under pressure as new U.S. tariffs introduced by President Donald Trump threaten to significantly impact the tech giant’s gross margins. According to Citi, over 90% of Apple’s manufacturing takes place in China—now hit with a steep 34% hike in duties, pushing total U.S. tariffs on Chinese imports to 54%. If China doesn’t receive an exemption, Apple could see up to a 9% reduction in its gross margin.

India, another key manufacturing base for Apple, is now facing 26% tariffs, which could contribute an additional 0.5% margin hit. Taiwan, part of Apple’s supply chain, was also targeted with 32% tariffs, further compounding the potential impact on Apple's production costs.

Citi warned of a wait-and-see approach regarding how the tariffs will ultimately be enforced, but the implications are already rippling through markets. Apple shares dropped as much as 7% in after-hours trading, leading declines among the tech-heavy Magnificent Seven.

The sweeping tariffs include a 10% universal duty on imports and match roughly half of the tariffs foreign nations apply to U.S. goods. Technology and automobile sectors, both heavily reliant on international supply chains, are expected to suffer the most. Trump also imposed a 25% tariff on all foreign automobiles, effective immediately.

U.S. importers will bear the brunt of these duties, likely passing increased costs to consumers. Analysts warn this could fuel inflation and heighten the risk of a U.S. and global recession, especially as companies like Apple face rising production costs and squeezed profit margins.

This development puts a spotlight on Apple’s manufacturing dependencies and the broader impact of escalating trade tensions on U.S. tech stocks.