Tariffs: Apple to increase production in India and Vietnam to avoid Trump's sanctions on China

Apple is doing its best to avoid the consequences of Trump's trade war . During the second quarter, the American giant expects "the majority of iPhones sold in the United States" to come from India, CEO Tim Cook said on Thursday, May 1. iPads, Macs, smartwatches, and AirPods will come from Vietnam, the executive added.

This will avoid the 145% tariffs imposed by the United States on products from China, traditionally the heart of Apple's manufacturing. Apple products from China are, however, exempt from most of the new tariffs (up to 125%), pending a review by the US government.

"Tariffs are still a bit of an unknown quantity" for the company, explained Matt Britzman, a financial analyst. "For now, Apple products are immune to punitive tariffs, but even at 20 %, the impact is not insignificant."

During his conference, Tim Cook warned that it was "very difficult to predict" how supply chains would be organized beyond the second quarter. "We understood a long time ago that concentrating everything in one place presented too many risks," the CEO said. "So, for some parts, we have sought new sources of supply, and that will continue."

Moving some production to India "raises questions about timing, capacity limitations, and inevitable cost increases that will squeeze margins, be passed on to consumers, or both," said Jacob Bourne, another financial analyst. As Apple prepares for a new round of product launches, he continued, "pricing policy will be very closely scrutinized in this context of economic and supply uncertainty."

Apple is therefore limiting its joy after the publication of strong first-quarter results. Net income came in at $24.8 billion in the first quarter, up 4.8% year-on-year, thanks in part to a 1.9% increase in iPhone sales. But during the results presentation, Tim Cook estimated the potential impact of the new tariffs on the current quarter at $900 million.

In the second quarter, the group forecasts a gross margin of between 45.5% and 46.5%, taking into account the effect of customs duties, a deterioration compared to previous periods (47% in the last quarter of 2024).