Apple's efforts to diversify its supply chain may have been for naught with the Trump administration's new tariffs that target multiple countries where Apple sources components for its iPhones, iPads, and Macs.
Apple has worked to move some of its manufacturing to countries like India, Vietnam, and Thailand, all of which are facing steep tariffs in addition to China and Taiwan. There is a minimum 10 percent tariff for all U.S. trading partners, and "reciprocal tariffs" on several countries where Apple suppliers are located. Some of the tariffs:
- Vietnam - 46%
- Thailand - 36%
- China - 34%
- Taiwan - 32%
- India - 26%
- Japan - 24%
- Malaysia - 24%
- EU - 20%
As The New York Times notes, Apple is already contending with a 20 percent tariff in China, which is set to increase significantly. Taiwan, where Apple sources the Apple silicon chips that go into all of its devices, is facing a 32 percent tariff.
The last time Trump was in office, Apple was able to get tariff exemptions or avoid tariffs entirely for some products, but Trump claims that he will not provide exemptions this time around. Morgan Stanley estimates that devices imported from China will cost Apple an additional $8.5 billion annually without exemptions, though it is not clear if Apple would pass those costs to consumers with price increases.
Apple CEO Tim Cook has said in the past that the United States is not able to compete with China and other countries when it comes to manufacturing due to a lack of skilled workers with expertise in advanced tooling.
Apple stock is down 7.5 percent in after hours trading after the tariff announcements. The tariffs will go into effect on April 9, according to Trump.
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