President Donald Trump’s new import tariffs will hit Apple hard. The president slapped all major manufacturing countries that Apple operates in with heavy import tariffs Wednesday in a bid to reshape international trade.
“It’s our declaration of economic independence,” Trump said during a speech at the White House announcing the tariffs. “Today we are standing up for the American worker and we are finally putting America first.”
This move undermines Apple’s efforts in recent years to diversify its supply chain away from China. The White House says the reciprocal tariffs will go into effect on April 9.
Trump imposes hefty tariffs on Apple’s production hubs
After months of warnings, the White House announced tariffs on imports from countries that impose steep taxes on U.S. goods. They hit every country where Apple manufactures its products, with tariffs for those ranging from 20% to as high as 46%. (Trump set a baseline tariff of 10% across the board, with higher rates for what he called the “worst offenders.”)
Apple shares opened Thursday about 8% lower after the news broke late Wednesday. That’s more than $200 billion in value taken away from Apple investors.
A Bloomberg report highlights the reciprocal tax on countries where Apple maintains a notable manufacturing presence:
- China: an additional 34%, bringing the total tariff to 54%
- Ireland: 20%
- India: 26%
- Japan: 24%
- Malaysia: 24%
- Taiwan: 32%
- Thailand: 36%
- Vietnam: 46%
India has become a major iPhone manufacturing hub for Apple in recent years, with the company looking to double its production there within two years. Similarly, TSMC’s facility in Taiwan manufactures Apple silicon for Macs as well as the A-series chips that power iPhones. Apple assembles AirPods, MacBooks and Apple Watches in Vietnam.
Trump framed the tariffs as a mechanism for bringing manufacturing back to the United States.
“If you want your tariff rate to be zero, then you build your product right here in America,” he said Wednesday.
Will Apple raise prices in U.S. over tariffs?
These tariffs will deal a blow to Apple, effectively undoing years of effort to diversify its supply chain away from China in preparation for a potential trade war. The tariffs also seem so high that Apple cannot absorb their impact simply by reducing its profit margin. The company might need to adjust the pricing of all its popular products — iPhones, iPads and Macs — to account for the higher tariffs.
“Apple will take these new tariff numbers and put them in models they have built and know within hours how big of a problem they have,” said Instrumental founder Anna-Katrina Shedletsky, who previously worked for Apple.
During Trump’s first term, Apple secured a tariff exemption, allowing its imports from China to avoid additional taxes. This time, however, Trump said he has no plans to grant such exemptions. This is despite Apple’s recent pledge to invest a record $500 billion in the United States over the next four years, and TSMC making chips in Arizona.
With a few days left before the reciprocal tariffs kick in, there’s a possibility the president will back out of his decision or tweak the tariffs at the last minute.
Not truly reciprocal tariffs
Trump calls these tariffs “reciprocal,” but that’s not what they are. Truly reciprocal tariffs levy the same taxes on U.S. imports that other countries charge on U.S. exports. That’s not what Trump’s order does. Instead, he placed tariffs on countries based on their trade deficits with the United States.
“President Trump will impose an individualized reciprocal higher tariff on the countries with which the United States has the largest trade deficits,” the White House said Wednesday. “All other countries will continue to be subject to the original 10% tariff baseline.”
We updated this article on April 3 with fresh information about the Trump tariffs’ effects on Apple.
Rajesh has been closely following and writing about the latest happenings in the world of mobile for nearly a decade now. While he prefers Android, he does not deny the superiority of Apple’s products and ecosystem.
