On Thursday, throughout Apple Inc.’s AAPL first-quarter earnings name, CEO Tim Cook dinner was questioned in regards to the potential impression of President Donald Trump’s tariff insurance policies on the corporate.
What Occurred: When requested by analyst Atif Malik from Citi in regards to the potential results of tariffs on Apple’s merchandise and client demand, Cook dinner acknowledged, “We’re monitoring the scenario and don’t have something extra so as to add than that.”
The shortage of readability from Cook dinner comes as Apple navigates a fancy world market, the place tariffs might considerably impression its provide chain and pricing methods.
Key Dangers From Proposed Tariffs
Semiconductor Tariffs: Trump’s proposed 25% to 100% duties on foreign-made chips might disrupt Apple’s provide of customized silicon from Taiwan Semiconductor Manufacturing Co. TSM, at the same time as the corporate ramps up its manufacturing facility with $6.6 billion in CHIPS Act funding.
Rising Shopper Costs: A 60% tariff on Chinese language imports might drive smartphone costs up by 26%, doubtlessly forcing Apple so as to add roughly $300 in taxes to a $1,000 iPhone. Chinese language suppliers have been Apple’s largest group of suppliers since 2020, rising from 48 in 2022 to 52 in 2023.
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Problems in Nearshoring: Whereas Apple has expanded manufacturing to Mexico and India—investing in Indian iPhone manufacturing and tapping Foxconn for AI server manufacturing in Mexico —Trump’s tariffs on Mexican and Canadian items might undermine these efforts.
Cook dinner’s Playbook For Navigating Tariffs
Through the first Trump presidency from 2017 to 2021, Cook dinner was a frequent customer to the White Home. Nevertheless, his interactions with the Joe Biden administration have been minimal.
In 2019, Cook dinner efficiently lobbied for Mac Professional tariff exemptions by gifting Trump a $6,000 unit and shifting restricted manufacturing to Texas.
Earlier this month, it was reported that Cook dinner contributed $1 million to Trump’s inaugural committee. This got here after a Mar-a-Lago dinner assembly and post-election congratulations.
On Thursday, the iPhone maker reported fiscal first-quarter income of $124.3 billion, surpassing analyst expectations of $124.13 billion.
Worth Motion: Apple’s inventory climbed 3.01% in after-hours buying and selling, reaching $244.75. Earlier on Thursday, it closed at $237.59, down 0.74%, in line with Benzinga Professional information.
Picture by Laura Hutton on Shutterstock
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