Trump Tariffs Could Cost Apple $1.1 Billion, Says Tim Cook

When US President Donald Trump took office for his second term, Apple looked like it was in a good position. Trump was singing Apple’s praises at that time. Then came the tariffs. Apple suddenly found itself in Trump’s bad books, and now it could cost them. During the company’s earnings call, Apple CEO Tim Cook said the Trump tariffs could cost the company $1.1 billion.

Trump tariffs cost Apple $1 billion

According to Cook, he said that the duties as a result of the Trump tariffs could end up costing Apple $1.1 billion. Cook also revealed that Apple had already spent $800 million during the June quarter. “The bulk of the tariffs that we paid were the IEEPA [International Emergency Economic Powers Act] tariffs that hit early in the year, related to China.”

$800 million is no small amount, but it is slightly lower than the predicted $900 million. However, it is a temporary win because, according to Cook, those costs could rise to $1.1 billion during the September quarter. We can’t say we’re surprised, especially given that Trump has imposed 25% tariffs on India. Apple has manufacturing facilities around the world, including China, Vietnam, and India.

With India and China hit with some of the highest tariffs, this will undoubtedly put some financial strain on Apple. That is, unless Apple can find a way around it. This either comes in the form of raising prices to balance out the tariffs, or Apple plays nicely with the Trump administration and starts building iPhones in the US.

Building iPhones in US

Obviously, building its iPhones in the US would allow Apple to escape some of the highest tariffs imposed. However, that remains a pipe dream for now.

It’s easy to ask Apple to bring manufacturing back to the US, but in reality, it’s a near-impossible ask. At least for the near future. This is because Apple has spent decades setting up its production in China, India, and Vietnam. Countries like China have all the necessary equipment and trained personnel to handle Apple’s manufacturing requests.

If Apple wants to set that up in the US, it is not something that will happen in the next year or two. Let’s not forget that labor costs in the US are higher than in other countries. This means that any potential savings in tariffs could be offset by the cost of labor.

Also, Apple sources its components from all over the world. Its supply chain is a long and complicated one. So, even if Apple could manufacture its iPhones in the US, it could still end up paying tariffs for components or raw materials imported from other countries.