Apple is under pressure as new tariffs introduced by former President Donald Trump target imported electronics from China, India, and Vietnam. With up to 90% of Apple’s products assembled in those countries, the impact could be severe.
The tariffs include rates of 54% for China, 26% for India, and 46% for Vietnam. These sharp increases make it harder for Apple to maintain profit margins without making significant changes.
Customers Could Shoulder the Cost
According to analyst Ming-Chi Kuo, Apple has few good options. If the company absorbs the added costs, it could lose up to 9% of its gross margin. That move would likely upset shareholders who expect steady profits.
Apple could shift more production to India and Vietnam to reduce the tariff burden. However, Trump’s plan offers no exemptions for those countries either. Expanding production takes time and money, and even then, Apple could still face a 5.5% to 6% margin loss.
Eventually, experts believe Apple will raise prices. It may not happen all at once or in obvious ways. Instead, Apple might rely on smaller changes—like lower trade-in values, higher-priced carrier deals, or reduced product features—to make up for the losses.
Hidden Costs for Consumers
Apple may also pressure suppliers to cut costs. But this can lead to problems. Suppliers might lower quality, reduce support, or delay updates, which could hurt the user experience.
Even if Apple avoids direct price hikes, customers may still pay more over time. Some might delay upgrades or skip new products, especially during a slowdown or global supply issue—similar to what happened during COVID-19.
Apple’s Next Move Remains Unclear
For now, Apple hasn’t confirmed how it will respond. But one thing is clear: the cost of doing business in a tariff-heavy world won’t just stay on Apple’s balance sheet—it’s likely coming to a customer’s receipt soon.
