The global economic landscape is about to witness a series of shocks as U.S. President Donald Trump announced various tariffs for different regions. As you would expect, some of those countries hold paramount importance for Apple because it has established entire supply chains there, which will now be adversely affected by these levies. One analyst states that if the company decides to keep its product prices unchanged, it could suffer between 8.5-9 percent reduction in its gross margins, which will severely hurt it financially. Instead, the latest details mention what steps Apple should take to curb those impending losses.
The analyst believes that Apple must focus on boosting production in India while raising the prices of its ‘Pro’ iPhone models, along with other recommendations
By now, a bevy of analysts have weighed in on what precautions technology companies can take to alleviate the financial hit that they will experience a few weeks from now. For Apple, TF International’s Ming-Chi Kuo has provided five recommendations for the firm to observe, which can help it overcome its losses, starting with boosting iPhone production in India. Assuming the region can obtain tariff exemptions by inking new trade deals with the U.S., the first step that Apple should take is to raise its iPhone production to 30 percent of its global output.
While the company is expected to bear some losses, the negative impact on its gross margins could be reduced from 3 percent to just 1 percent. Another step is increasing the prices of the ‘Pro’ iPhone models, which account for between 65-70 percent of new release sales. Kuo does not mention the revised starting price of the iPhone 17 Pro and iPhone 17 Pro Max, but we cannot comment on this recommendation. Other practices involve reducing trade-in values, increasing carrier subsidies, and informing its supply chain to explore various cost-cutting measures.
With 85-90% of Apple's hardware assembly based in China and the rest in India and Vietnam, the Trump administration's new tariff policies—imposing 54%, 26%, and 46%, respectively—will significantly raise costs for hardware exports to the US. If Apple keeps prices unchanged, its…
— 郭明錤 (Ming-Chi Kuo) (@mingchikuo) April 3, 2025
To recap, Trump’s tariffs will now reach up to 46 percent, but there is still the possibility that the U.S. government will reduce these figures, assuming the regions subject to these levies can come up with attractive counterproposals. We are confident that Apple CEO Tim Cook will most likely obtain an audience with U.S. President Donald Trump and remind him about the company’s $500 billion investment pledge as a reminder not to exercise such hefty tariff raises in countries that mass manufacture various products.
News Source: Ming-Chi Kuo
