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U.S. iPhones: Apple projects most units sold domestically to be imported from India

Apple CEO, Tim Cook, outlined that this step aims to dodge the 145% tariffs imposed by the US on goods originating from China.

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U.S. iPhones: Apple projects most units sold domestically to be imported from India

The renowned Apple brand finds itself squarely in the crosshairs of the trade war ignited by Donald Trump. During the presentation of its quarterly financials on May 1, Apple's CEO forecasted that the majority of iPhones sold within the U.S. would be sourced from India this quarter. This strategic move shrewdly avoids the 145% tariffs slapped on products from China, Apple's long-standing production hub, as outlined by Tim Cook. With Vietnam stepping up as the new production hub, iPads, Macs, smartwatches, and AirPods will also call Vietnam home.

Cook cautioned that, though currently, Apple products from China skirt most of the new tariffs (with 125% on the 145%), a review of the situation by the U.S. government is underway.

Apple's first-quarter results outperformed projections, propelled by a resurgence in sales of the iPhone, its flagship product. However, the company anticipates costs climbing sharply in the following quarter due to Donald Trump's tariffs. During the post-results conference call, Cook estimated that the new tariffs could cost the company a staggering $900 million in the current quarter.

Apple, among the GAFAM (Google, Amazon, Facebook, Apple, and Microsoft), bears one of the heaviest burdens in the trade war against China, primarily due to its significant dependence on Chinese manufacturing (~80%) and the ensuing supply chain risks. This vulnerability leaves Apple exposed to hefty tariffs, with an estimated $900 million in added costs this quarter and potential price hikes to pass these expenses onto consumers. Moreover, Apple struggles in the Chinese market and faces escalating regulatory pressures in both the EU and U.S., further complicating its global operations.

In response to these challenges, the company is actively exploring manufacturing more U.S.-bound iPhones in India, a move aimed at decreasing reliance on Chinese manufacturing and minimizing tariff-related expenses. Despite these hurdles, Apple has experienced a surge in sales as consumers Safari-shop for products in anticipation of potential price hikes due to tariffs.

  1. The U.S. government is currently reviewing Apple's situation, as some of its products from China still face tariffs, despite the 145% rate being evaded so far.
  2. Apple, being heavily dependent on Chinese manufacturing, faces an estimated $900 million in added costs this quarter due to the tariffs instated by Donald Trump.
  3. As a result of the tariffs and the vulnerability of its reliance on Chinese manufacturing, Apple could potentially increase prices for consumers to cover these expenses.
  4. In an effort to decrease its reliance on Chinese manufacturing and minimize tariff-related expenses, Apple is exploring manufacturing more iPhones in India.
Apple's chief executive, Tim Cook, justifies this move as a strategy to bypass the 145% tariffs imposed by the U.S. on goods manufactured in China.
Apple's top executive, Tim Cook, laid out the reasoning that this action aims to bypass the 145% tariffs the U.S. imposed on goods originating from China.

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