# Apple Estimates Tariffs Will Cost $900 Million This Quarter, Shifting Production to India and Vietnam

## Apple Estimates Tariffs Will Cost $900 Million This Quarter, Shifting Production to India and Vietnam

Apple CEO Tim Cook has provided the most detailed explanation yet regarding the impact of US tariffs on the company’s bottom line. During Wednesday’s earnings call, Cook revealed that Apple anticipates tariffs will add a staggering $900 million to its costs this quarter alone.

“Assuming the current global tariff rates, policies and applications do not change for the balance of the quarter and no new tariffs are added, we estimate the impact to add $900 million to our costs,” Cook stated. However, he cautioned against extrapolating this figure to future quarters, citing “certain unique factors that benefit the June quarter.”

Cook elaborated further during the Q&A portion of the call, detailing Apple’s strategies to mitigate the impact of these tariffs. Notably, the company is shifting production origins for key products. According to Cook, the majority of iPhones sold in the US during the June quarter will be manufactured in India. Similarly, almost all iPads, Macs, Apple Watches, and AirPods sold in the US will originate from Vietnam. China, however, will remain the primary country of origin for the majority of Apple’s total product sales outside the US.

The tariffs impacting Apple most significantly in the June quarter are the 20% IEEPA-related tariff on imports to the US from China. Additionally, a 125% tariff on certain categories of products imported into China, specifically impacting some US AppleCare services and accessories, brings the total tariff rate on these products to at least 145%.

Importantly, Cook clarified that the vast majority of Apple’s products, including the iPhone, Mac, iPad, Apple Watch, and Vision Pro, are currently *not* subject to the reciprocal tariffs announced in April. This is due to a Section 232 investigation initiated by the Commerce Department into imports of semiconductors, semiconductor manufacturing equipment, and downstream products that contain semiconductors.

While Apple projects a significant tariff-related cost increase for the June quarter, the company remains cautious about predicting future impacts. The “unique factors” influencing this quarter suggest potential for higher costs down the line. Despite the uncertainty, Cook assured investors that Apple would continue to manage the company “with thoughtful and deliberate decisions.” This likely indicates further adjustments to production strategies and potentially price adjustments as Apple navigates the complex landscape of global trade and tariffs.