Apple Inc. is struggling to assess the impact of Trump’s tariff policy beyond June, CEO Tim Cook said during Apple’s second-quarter earnings call on Thursday. Even after a strong second-quarter performance that beat Wall Street expectations for revenue, Apple shares fell by more than 4% in the past month.
Cook said Apple only saw a “limited impact” from tariffs during the first three months of the year. Yet, for the current quarter ending in June, the company expects to incur an additional $900 million in costs due to existing tariffs.
“The vast majority of our products are not subject to these tariffs,” Cook said, but added, “It’s very difficult to predict beyond June.”
The 64-year-old CEO, who made his name in Silicon Valley as Apple’s supply chain expert, praised his logistics team for optimizing inventory and sourcing strategies. “The operational team has done an incredible job around optimizing the supply chain and the inventory,” he noted.
Diversifying the supply chain, but for how long?
US tariffs on China have pushed Apple to move substantial portions of its manufacturing outside Eastern Asia in recent years, targeting India and Vietnam as alternatives. Cook confirmed that products bound for the US are now being sourced from those two countries, both of which currently face 10% tariffs.
Products sold internationally are still being manufactured in China, which is now subject to a dramatic 145% tariff rate under the Trump administration’s trade policy.
“The majority of iPhones sold in the US will have India as their country of origin. Vietnam will be the country of origin for almost all iPad, Mac, Apple Watch, and AirPods products sold in America,” Cook told analysts.
Cook also mentioned that Apple had built up inventories ahead of the tariffs, and the new products will be added as manufacturing purchase obligations in its US Securities and Exchange Commission (SEC) filings. However, he said there was “no obvious evidence” of consumers stockpiling Apple products before price hikes supposedly start.
Some components, such as those for AppleCare and certain accessories, are still being imported from China and are thus subject to the 145% tariff. Cook asserted that Apple is preparing for future tariffs on tech products like semiconductors through a Section 232 Investigation.
Much like Apple, several other tech firms are struggling to streamline operations due to tariff-related discrepancies. Amazon’s Chief Financial Officer Brian Olsavsky said on Thursday that his company would expand its earnings guidance because US trade policies are “unpredictable.”
As reported by Cryptopolitan, Microsoft raised prices on its Xbox console by $100 on Thursday, although tariffs were only briefly mentioned in its earnings report the day prior.
Apple expects its revenue to grow in the “low to mid-single digits” for Q2 2025. The company posted $85.78 billion in revenue during the same quarter last year.
Apple suffers legal setback in Epic Games court battle
In other related news, in Apple’s legal fight against Epic Games, US District Judge Yvonne Gonzalez Rogers ruled on Thursday that Apple must immediately stop collecting fees on purchases made outside of iOS apps and cannot prevent developers from directing users to third-party purchasing options.
“Apple’s 30 percent commission “allowed it to reap supracompetitive operating margins” and was not tied to the value of its intellectual property, and thus, was anticompetitive. Apple’s response was to charge a 27 percent commission (again tied to nothing) on off-app purchases, where it had previously charged nothing,” the court noted.
The judge said the company willfully ignored a previous injunction from her original 2021 ruling. “That Apple thought this Court would tolerate such insubordination was a gross miscalculation,” she wrote. The case has now been referred to the US attorney for a possible criminal contempt investigation.
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