Apple CEO Tim Cook has announced that U.S. tariffs on Chinese goods could add an estimated $900 million to the company’s costs this quarter, pushing the tech giant to accelerate its shift of iPhone production from China to India.
Speaking during the company’s quarterly earnings call on Thursday, Cook said that if current global tariff policies remain unchanged, Apple anticipates a significant rise in manufacturing expenses. “Assuming no new tariffs are introduced and existing ones stay in place, we expect about $900 million in additional costs this quarter,” he noted.
To reduce its exposure, Apple is now making a major move: most iPhones sold in the United States will soon originate from India. Although Apple has gradually expanded production in India over the past few years, this marks the first time the country will become the primary hub for iPhones destined for U.S. consumers. This strategic pivot highlights the growing impact of the 145% tariffs imposed by the Trump administration on Chinese imports. While iPhones have largely been exempt from the steepest levies thanks to carve-outs for smartphones and semiconductor-based electronics, Cook confirmed that products made in China still face a baseline 20% tariff.
Historically, roughly 90% of iPhones have been manufactured in China. Despite Apple’s efforts to diversify production, China has remained the company’s dominant manufacturing base. However, Cook emphasized that relying too heavily on one location had proven risky. “We have a complex supply chain with inherent risks,” he said. “We realized long ago that concentrating everything in one place was not sustainable.”
In addition to shifting iPhone assembly to India, Apple plans to manufacture most iPads, Macs, Apple Watches, and AirPods sold in the U.S. in Vietnam. Products for non-U.S. markets will continue to be primarily made in China.
Investors reacted cautiously to the news, sending Apple’s stock down nearly 4% in after-hours trading. Concerns over rising costs and potential supply chain instability weighed on the company’s outlook.
Still, Apple posted solid financial results for the January–March quarter. The company’s revenue rose 5% year-over-year to $95.4 billion, with iPhone sales climbing 2% to $46.8 billion. Cook noted that the company had been able to minimize tariff impacts last quarter by optimizing supply chains and managing inventories.
However, Apple did report a slight dip in sales in the Greater China region — which includes Hong Kong and Taiwan — falling 2% to $16 billion. The company faces increasing competition from Chinese smartphone brands in what remains its second-largest market.
Although the Trump administration has repeatedly pushed for Apple to bring iPhone production to the U.S., industry experts say such a move is highly unlikely. Dan Ives, an analyst at Wedbush Securities, estimated that the cost of an iPhone could skyrocket to around $3,500 if made in the United States.
Earlier this year, Apple announced a $500 billion investment over the next four years to expand its operations outside of China — a move praised by Trump. However, much of that spending will go toward building data centers for Apple’s artificial intelligence services and establishing a manufacturing training academy, not toward domestic iPhone production.
