On Thursday, during Apple Inc.’s (NASDAQ:AAPL) fiscal second-quarter earnings call, CEO Tim Cook said that the tech giant expects a $900 million cost impact in the June quarter due to tariffs.
What Happened: “For the June [quarter], we do expect the majority of iPhones sold in the U.S. will have India as their country of origin,” Cook said. He added that Vietnam will now serve as the production hub for nearly all iPads, Macs, Apple Watches and AirPods sold in the U.S.
Apple’s pivot comes amid mounting tariffs on Chinese imports.
“Most of our tariff exposure relates to the February IEEPA-related tariff at the rate of 20%, which applies to imports to the U.S. for products that have China as their country of origin,” Cook explained.
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He also noted that Apple’s main product lines — iPhone, Mac, iPad, Apple Watch and Vision Pro — are not currently impacted by the newly announced global reciprocal tariffs related to semiconductors.
Still, the company is bracing for changes. “Assuming that the current global tariff rates, policies and applications don’t change for the balance of the quarter,” the impact will be $900 million to the company’s costs.
Why It’s Important: Apple posted fiscal second-quarter revenue of $95.36 billion, surpassing Wall Street expectations of $94.53 billion. For the June quarter, the company projects revenue growth in the low-to-mid-single-digit range and forecasts a gross margin between 45.5% and 46.5%.
Previously, Senator Elizabeth Warren (D-Mass.) raised concerns about Cook’s role in seeking tariff exemptions for Apple products after President Donald Trump threatened to impose up to 145% tariffs on Chinese imports.
If implemented, such tariffs would have significantly impacted Apple’s supply chain and profit margins. Wedbush analyst Dan Ives had warned that iPhones made in the U.S. could cost as much as $3,500 — more than triple their current price.
Photo Courtesy: Ringo Chiu on Shutterstock.com
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This article Apple CEO Tim Cook Warns Of $900 Million Tariff Impact In June Quarter, Expects Majority Of iPhones Sold In US To Be Made In India originally appeared on Benzinga.com
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