Apple has warned investors about mounting challenges from US tariffs despite reporting stronger-than-expected profits for the first quarter. Chief executive Tim Cook said the impact of tariffs had been “limited” earlier this year, but noted that the shifting trade environment made it difficult to predict the full financial toll.
“We are not able to precisely estimate the impact of tariffs, as we are uncertain of potential future actions prior to the end of the quarter,” Cook told investors during an earnings call. “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 US$900 million to our costs.”
Despite the significant expense, Cook said Apple has no immediate plans to increase product prices. “On the pricing piece, we have nothing to announce today,” he added.
Apple remains exempt from the most severe reciprocal tariffs introduced during the Trump administration, but Cook acknowledged ongoing risks from trade tensions. To mitigate those risks, Apple has been accelerating the diversification of its manufacturing base.
While the majority of iPhones sold in the US are still made in China, Cook said production in India had ramped up significantly and was expected to account for most US iPhone shipments going forward. Meanwhile, manufacturing for most iPad, Mac, Apple Watch and AirPod models destined for the US market has been relocated to Vietnam. China, however, will continue to be the main production hub for Apple products sold outside the US.
(Source: SCMP / TechCrunch)
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