Apple Inc. is making significant adjustments to its supply chain in response to impending tariffs, announcing that Vietnam will become the primary country of origin for nearly all iPads, Macs, Apple Watches, and AirPods sold in the United States. The tech behemoth is bracing for a $900 million increase in expenses. This increase is completely attributable to tariffs imposed on imported products.
In that same first quarter of 2025, Apple continued their impressive run with a whopping 9% increase in total sales. This adds up to an incredible $155.7 billion more than the same period last year. The company enjoyed an extraordinary increase in profits, more than 60% year-on-year to around $17 billion. Even with all these big numbers, Apple is hitting some new headwinds with tariffs looming large and poised to hurt its cost structure.
Not only does the company’s decision and future U.S. production underscore its intent to be a diversified global manufacturing supply chain, what we’re seeing as recently as last week, Tim Cook, Apple’s CEO, talked about the company’s efforts to diversify the company’s suppliers. This strategy is designed to minimize risks associated with tariffs. While acknowledging the massive deployment that Apple’s created, he stressed their focus on deployment of affordable products to consumers.
“We do expect the majority of iPhones sold in the US will have India as their country of origin,” – Tim Cook
In Asia, for example, India has become an important production hub for Apple and others. By the end of June, they plan to produce a majority of the iPhones destined for the US market with domestic materials there. The company still plans to continue manufacturing the majority of its products in China. These products will be manufactured almost exclusively for sale overseas.
Even with these tariffs hanging over their heads, Apple is projecting record revenue growth during the next quarter. In that same quarter, Apple’s revenues increased 5% year-over-year, to $95.4 billion. Cook notes that the company is already flexible, even with such economic volatility. This optimism only serves to underscore their region’s resilience.
President Donald Trump has used the company to pronounce that Apple products would be made more and more in the US. Although his administration has implemented various tariffs, he spared key electronics from new import taxes, providing some relief to companies like Apple.
So great is this change, that industry analysts have reported this as the most significant strategic shift in Apple’s history. For years, Cook insisted that only China was capable of efficiently making iPhones. In the words of industry analyst Patrick Moorhead, this transition is going from “cool to crave.”
“This is a marked change from what [Cook] said a few years back when he said that only China can build iPhones,” – Patrick Moorhead
Apple says it will invest $500 billion in the U.S. across all 50 states over the next four years. This aggressive step demonstrates their commitment to strengthening their domestic footprint while addressing the challenges of international trade. Read more about the company’s proactive steps to address tariff impacts on its business here. This tactic is ensuring that they stay one step ahead of their competitors right now, too.
Even Amazon Web Services CEO Andy Jassy noted that Apple seems to grow no matter what the unknown, uncertainty or tariff.
“Obviously no one of us knows exactly where tariffs will settle or when,” – Andy Jassy
“We’re often able to weather challenging conditions better than others,” – Andy Jassy