iPhones Sold in US Will No Longer Come From China as Apple Reveals Impact of Trump’s Tariffs
In a significant move to mitigate the impact of US President Donald Trump’s tariffs, Apple has announced that iPhones sold in the US will no longer be manufactured in China. According to a report by Sky News, the tech giant plans to source most of its iPhones from India, while iPads will be manufactured in Vietnam.
This strategic shift aims to prevent dramatic price rises for American consumers. As Sky News reports, Apple’s CEO Tim Cook believes that Trump’s tariffs will add $677m in costs during the current quarter, assuming the US president’s policies remain unchanged. The company’s financial results for the first quarter of the year revealed that revenue stood at $71.8bn, with earnings of $18.6bn beating analyst expectations.
The impact of Trump’s trade war on Apple’s performance has been limited so far, but the company’s reliance on Chinese factories to manufacture its iPhones has made it more exposed to the tariffs than others. As Sky News notes, Apple’s stock plunged by 23% after the president unveiled plans to impose reciprocal tariffs on dozens of countries, wiping out $582bn of value. Although its share price has recovered slightly, it remains 5% lower than before the tariffs were announced.
Growing tensions between Washington and Beijing are also affecting Apple’s sales in China, which fell 2.3% between January and March. According to Tim Cook, "We have a complex supply chain. There’s always risk in the supply chain. What we learned some time ago was that having everything in one location had too much risk with it." Devices sold outside of the US will continue to be manufactured in China.
The full impact of the tariffs on Apple’s business is yet to be seen, but the company’s decision to diversify its manufacturing base is seen as a strategic move to mitigate the risks associated with Trump’s trade policies. As Sky News reports, high demand for iPhones during the first quarter may have been driven by US shoppers rushing to make purchases before the new tariffs came into force. However, the true extent of the impact of panic buying will only emerge when Apple reports its results for the second quarter later in the year.
In response to the challenges posed by the trade war, Apple is taking steps to reduce its dependence on China. The company’s decision to manufacture iPhones in India and iPads in Vietnam is part of a broader strategy to diversify its supply chain and minimize the risks associated with Trump’s tariffs. As Sky News notes, the move is also likely to have significant implications for the tech industry as a whole, with many companies likely to follow Apple’s lead in diversifying their manufacturing bases.
The ongoing trade tensions between the US and China are having far-reaching consequences for businesses around the world. As the situation continues to evolve, companies like Apple are being forced to adapt and innovate in order to stay ahead of the curve. With its latest move, Apple is demonstrating its commitment to finding solutions to the challenges posed by Trump’s tariffs, and it will be interesting to see how the company’s strategy plays out in the coming months.
The information in this article is sourced from Sky News: iPhones sold in US will no longer come from China as Apple reveals impact of Trump’s tariffs.
