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Apple faces challenges from President Donald Trump’s tariffs on Chinese goods.
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A US 20% tariff on goods from China threatens Apple’s vast supply chain in the country.
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The iPhone maker is likely weighing its options to avoid cost impact, analysts said.
Apple managed to avoid some tariffs on goods from China during President Donald Trump’s first term. This time around, it’s unclear if Apple CEO Tim Cook can get the same carveouts — despite promising investment in US manufacturing and jobs.
Apple is facing a potential financial hit from Trump’s tariffs on goods from foreign countries, including China. Trump doubled the tariff on goods from China from 10% to 20%, on top of existing levies, and slapped a 25% tariff on goods from Canada and Mexico, beginning Tuesday.
Apple, which has a large supply chain network in China, will have to navigate the effects of Trump’s executive order. Morningstar estimates that 70% of iPhones are manufactured in China, while S&P Global said it’s about 90% in 2025.
The order could also weigh on sales of products in Greater China itself, which represented 17% of revenue last year.
If the tariffs remain as they are, analysts expect Apple to make adjustments to offset the potential financial impact. However, Forrester analyst Dipanjan Chatterjee said the company’s plans will “likely be in flux for some time.”
He added, “Apple is sorting this all out now.”
Consumers can “expect mixed signals,” said Jacob Bourne, an analyst at BI’s sister company, EMARKETER.
Here are the options that Chatterjee and other analysts who follow Apple say the tech behemoth is considering.
Avoid the tariffs altogether
Cook successfully secured exemptions from the 10% tariff on goods from China during Trump’s previous term, and analysts haven’t counted him out this time.
Apple has already said it’ll add to its US footprint, including pledging a multibillion-dollar investment toward its projects and saying it plans to hire 20,000 people over the next four years. It’s partly an attempt to gain exemptions for Apple during this term, Bourne said.
“We’re optimistic that Apple’s $500 billion investment announcement will help the firm gain an exemption from the tariffs underway,” Morningstar analyst William Kerwin said.
If not, it’ll have to examine other options.
Bump up the price of iPhones
It’s too soon to know Apple’s “mitigation strategies” for certain, but increasing the price of consumer goods likely isn’t off the table, Chatterjee told BI.
Apple launched a new iPad Air with Apple Intelligence capabilities on the same day the tariffs went into effect. The tablets come with an M3 chip and start at $599 — the same price as its predecessor from 2024.
“I wouldn’t expect a knee-jerk reaction from Apple, which is why the iPad Air M3 pricing remains unchanged,” Chatterjee said.
The iPhone will be where Apple will make its “toughest decisions,” Bourne said. IPhone sales have stumbled in Greater China, and China’s government announced plans for retaliatory tariffs on Tuesday, which could hurt them more.
IPhone prices in the US haven’t risen since 2020 outside of its Pro Max model going from $1099 to $1199 when the Apple Intelligence-powered iPhone 15 came out, Kerwin said. If gradual price hikes occur, analysts said Apple’s best-performing regions and products, like the iPhone, will get a price bump first.
Apple didn’t immediately respond to a request for comment from BI.
Shift its supply chain out of China
By shifting production to “less tariff disadvantaged locations,” Apple would avoid absorbing the cost or placing it on consumers.
It’s easier said than done. Apple has fostered deep relationships with Chinese manufacturers over the years. Although it’s had some victories in the attempted shift to other countries, it still relies on China for its incomparable scale of operations.
For three years, Apple has shown signs that it’s looking to move its supply chain away from China. The tech giant moved some of its iPhone production to India in 2022. In December, Bloomberg reported its plans to begin producing AirPods in India.
However, some experts have said trying to avoid tariffs this time around would be harder, BI previously reported. Trump could target more countries than he did in his first term, and places where businesses shifted their operations to avoid tariffs might not be spared, experts told BI in February.
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