Apple CEO Tim Cook announced during the earnings call that tariffs are expected to cost the company $1.1 billion in the July-to-September quarter, an increase from the $800 million incurred in the previous quarter. These projections are based on current tariff rates and policies but could end up lower, as seen in recent quarters.
The majority of these tariffs are related to the International Emergency Economic Powers Act (IEEPA). Earlier this year, the U.S. and China agreed to reduce reciprocal tariffs from 125% to 10%, plus a 20% duty linked to fentanyl, with the agreement set to last until August 12.
Cook emphasized that strong product demand, particularly for the iPhone 16 family, drove sales growth rather than consumers rushing to buy ahead of tariffs. iPhone sales rose 13% year-over-year, generating $44.5 billion in revenue—nearly half of Apple’s total $94 billion for the quarter.
Apple’s manufacturing is spread across India, China, and Vietnam, all subject to tariffs: 25% in India and 20% in Vietnam. Nearly half of U.S.-sold iPhones are now made in India, while Macs, iPads, and watches for U.S. customers are produced in Vietnam.
Despite previous pressure from President Trump regarding supply chain shifts, Cook reaffirmed Apple’s commitment to the U.S., highlighting plans to invest $500 billion over four years in domestic chip and semiconductor production.
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