Apple to Absorb $1.1 Billion Tariff Hit Amid Trade Policy Shifts

Apple is expecting a $1.1 billion hit in the upcoming quarter due to expiring U.S. tariffs initially introduced under former President Donald Trump. This comes after the company already faced an $800 million tariff-related cost in its June-quarter results. CEO Tim Cook confirmed the escalation during the company’s Q3 2025 earnings call.

🚧 Tariffs’ Impact on Apple’s Finances

Tariffs previously imposed on imports from China and other countries have resulted in increasing costs for Apple. After an $800 million burden in Q3, the company projects tariffs will cost an additional $1.1 billion in Q4, if trade policies remain unchanged.

This financial impact is attributed to both the direct tariff charges and increased logistics complexity. Apple is counteracting these pressures by shifting production—especially U.S.-bound iPhones—to India and Vietnam, aligning its supply chain strategy with tariff mitigation.

📊 Quarterly Performance and Market Response

Despite tariff-related headwinds, Apple delivered $94.04 billion in revenue during Q3 (ended June 28, 2025)—a near 10% year-over-year increase. The iPhone segment surged by 13.5% to $44.58 billion, largely driven by early buyer demand amid tariff concerns. Earnings per share reached $1.57, outperforming targets.

However, Apple’s share price rose only modestly, as investors weighed the solid results against concerns over rising tariff costs, delayed AI initiatives, and uncertainty in global markets.

🧭 Strategic Responses and AI Push

Apple is adapting to changing trade conditions by:

• Localizing assembly: Major U.S.-bound product manufacturing shifted to India and Vietnam to avoid tariff exposures.
• Expanding AI investment: Despite being behind rivals, Apple is increasing spending on AI—developing a personalized version of Siri expected in 2026—and pursuing strategic acquisitions to accelerate its roadmap. Business Insider

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