Apple Inc. is bracing for a staggering $900 million increase in costs this quarter due to tariffs imposed by the Trump administration on imported goods, even as critical electronics were spared from these new taxes. The iPhone maker's projections reflect the ongoing disruption from Trump’s tariff strategy, which has thrown supply chains into disarray and created unpredictability around consumer demand.
In a move to counter these tariffs, Apple announced its decision to relocate the manufacturing of iPhones designated for the U.S. market away from China, where tariffs are highest. The tech giant revealed that most iPhones sold in the U.S. in the upcoming months will be produced in India, a significant shift from its previous reliance on Chinese manufacturing.
While Apple contends with the impact of tariffs, it reported a 5% revenue increase for the first quarter of the year, totaling $95.4 billion compared to the previous year. Similarly, Amazon demonstrated resilience against tariff fluctuations, recording an 8% year-on-year increase in North American e-commerce sales. Amazon CEO Andy Jassy expressed confidence in the company's ability to weather adverse conditions, citing the firm’s successful navigation of past disruptions, including the COVID-19 pandemic.
The tariffs, characterized by Trump as "reciprocal," aim to encourage companies to bolster U.S. manufacturing. Despite these goals, the reality is that as Apple increases production in India and Vietnam – slated to manufacture nearly all of its iPads, Macs, Apple Watches, and AirPods for the U.S. market – the U.S. remains less favorable for its manufacturing strategy.
During a recent investor call, Apple CEO Tim Cook emphasized the company's commitment to invest $500 billion across various states over the next four years. Nevertheless, the focus on shifting production to India has drawn attention, a notable departure from Cook's previous assertions that only China could adequately produce iPhones.
Market analysts commented on the significance of this manufacturing pivot, underscoring the potential progress Apple could achieve in diversifying its supply chain. Amazon is taking similar steps to fortify its supply dynamics against the ongoing uncertainties posed by tariffs, ensuring a varied seller ecosystem to maintain resilience. Despite the tariffs, Amazon reported a surge in overall sales, growing 9% to $155.7 billion in the first quarter of 2025, with profits soaring more than 60% year-on-year to roughly $17 billion.
