How Apple Could Navigate Trump's Tariffs, According to Gurman

Apple is likely to take a multi-pronged approach to manage the impact of impending tariffs on its products, according to Bloomberg's Mark Gurman. The company faces looming challenges, as new tariffs will affect not just China-based production but also the very countries Apple has diversified into.

The upcoming tariffs range from 20% to 46% across Apple's global manufacturing hubs. India, where Apple increasingly builds iPhones and AirPods, will face a 26% tariff. Vietnam, which produces AirPods, iPads, Apple Watches and Macs, will be hit with a 46% levy. Malaysia, Thailand, Indonesia, and even Ireland will face tariffs between a 20% and 37%.

Gurman believes Apple will pursue a combined strategy to mitigate these impacts. First, he says the company will likely pressure its component suppliers and manufacturing partners to reduce prices. Second, Apple may absorb a portion of the increased costs, eating into its typical hardware profit margin of around 45%.

Third, and perhaps most concerning for consumers, Apple could consider iPhone price adjustments. The company has already implemented price increases in other markets in response to tax policies, currency fluctuations, and inflation. "I expect that Apple will seriously consider iPhone price adjustments," writes Gurman. "It helps that consumers have probably heard about the outside factors here and won’t see it as a cash grab."

Finally, Apple will likely accelerate its supply chain diversification efforts. While the company won't be able to rapidly shift production to the United States, it may prioritize shipments from countries with lower tariff rates, such as routing more iPhones from India rather than China.

Apple has been stockpiling inventory in the U.S. for months in anticipation of the tariffs, which could delay price increases until the iPhone 17 launch in September. Units already in the U.S. are exempt from the tariffs, which officially take effect on April 9.

Despite Apple CEO Tim Cook's efforts to cultivate a relationship with Trump, including attending his inauguration and pledging $500 billion in US investments over the next four years, the company has so far not been successful in securing exemptions.

For consumers wondering whether they will have to pay more for an iPhone this fall, Gurman suggests Apple might become more aggressive with trade-in specials and installment plans to offset potential price increases, or possibly revive its previously considered hardware subscription service.

Apple has not yet made any comment on the tariffs or its plans going forward, but the company is surely working behind the scenes to calculate their impact.

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