When President Trump first pushed invoices to China in 2018, Apple began moving more iPads and airpods in Vietnam and iPhones in India.
But with Mr Trump’s return to the White House, this strategy may have been upgraded for the most valuable public company being negotiated in the world.
On Wednesday, Mr Trump said the United States would put 46 % in Vietnam and 26 % in India. The White House said the invoices are effective immediately, but some trade experts consider them to be preliminary and designed to be a starting point for negotiations to reduce duties abroad.
Proposed invoices threaten to make up the pressure on Apple’s business. The company already deals with 20 % invoices for products imported from China, where Apple makes about 90 percent of the iPhones it sells worldwide. Mr Trump said the rate would reach 34 % as part of his new invoice.
An Apple spokesman refused to comment.
While Apple is the most prominent technology company that feels the invoice sting, most other technology companies will see an impact – directly or indirectly. Google and Microsoft, for example, are not so much dependent on international suppliers, but have remarkable electronics businesses. And invoices could increase the cost of constructing the huge, new data centers that companies plan to create new artificial intelligence technology.
The new contributions are part of Mr Trump’s efforts to redesign world trade with invoices in any country that imposes US export pay. US trade officials estimate that India has a 13.5 % tariff rate in US goods, with a 39 % invoice for agricultural products. Vietnam has 8.1 % duties in US goods, with an invoice of 17.1 % in agricultural products.
But during a press conference at the White House, Mr Trump said that the combination of invoices, coins and commercial barriers had a much more significant impact.
The cost of “mutual invoices”, as Mr Trump calls them, could put Apple businesses in a jam. The iPhones, the iPads and Apple monitor that the company sells it delivers three quarters of the annual revenue of $ 400 billion. With Mr Trump saying that he will not allow the exclusion of products from tariffs, Apple should either pay these fees, which will reduce its profit, or indirectly transfer these additional costs to customers by increasing prices.
Invoices for iPhones and other appliances imported from China will increase Apple’s annual costs by $ 8.5 billion, without any relief from Trump administration, according to Morgan Stanley. This would reduce the company’s profit next year by $ 0.52 per share or about $ 7.85 billion. This would be about 7 % hit in next year’s profits.
Apple’s stock decreased by 5.7 % in transactions after purchase after Mr Trump’s observations.
“Apple will take these new pricing numbers and put them on models they have built and know in a few hours how big by a problem they have,” said Anna-Katrina Sedletsky, founder of Instrumental, a Bay Area company that uses artificial intelligence to improve productive performance. Worked in the past at Apple.
After Mr Trump assumed duties, Tim Cook, Apple’s chief executive, went to the White House and promised that Apple would invest hundreds of billions of dollars in the United States. In February, Apple followed this promise, committing to investing $ 500 billion in the country, with much of its money already part of its spending plans.
During Trump’s previous administration, Mr Cook’s work to build a relationship with Mr Trump helped Apple avoid invoices for most of its products. US trade employees in the previous Trump administration did not set invoices on iPhones and removed invoices from Apple Watch.
In 2019, Mr Trump traveled to an Apple plant in Texas that made desktop computers. Mr Cook was next to Mr Trump, as the president received a credit for the factory, which had made computers since 2013.
Over the years, Apple has not moved the production of an individual product in the United States. Instead, an attempt to diversify beyond China began.
In 2017, as Trump started in the office, Apple began creating assembly lines for iPhones in India. It took five years to train workers and build the infrastructure to make its newest iPhones in the country. It is in the process of increasing production there, hoping that the country’s factories build about 25 % of the 200 million iPhones it sells annually.
The company also started shifting airpods, iPads and MacBooks in Vietnam. The country became a destination for Apple and others after Covid-19, closed the factories in China in 2020 and the Vietnam factories represented more than 10 % of the top 200 suppliers the company had in 2023.
Vietnam was an attractive location due to its proximity to China. India was tempting because Apple wanted to boost iPhones sales in the country, which is the world’s second largest smartphone market.
But Apple has previously struggled with US production. The Texas plant that made the Mac had problems, as some workers left the job after their turn, but before replacing them, forcing the company to close the assembly line. He also struggled to find suppliers who could make the accessories they needed as a custom screw.
Mr Cook said the United States does not have enough specialized production workers to compete in China. At a conference at the end of 2017, he said that China was one of the few places where Apple could reliably find people capable of running the last machines that make its products.
“In the US, you could have a meeting of mechanical tools and I’m not sure we could fill the room,” Mr Cook said. “In China. You could fill multiple football stadiums.”
