Apple CEO Tim Cook should be breathing a sigh of relief.
The White House on Wednesday ratcheted tariffs on Indian imports up by an additional 25%, raising the total levies on one of the United States' most crucial trading partners to 50% when they kick in later this month.
But smartphones are exempt from President Donald Trump's new levies on India, marking a crucial win for the tech giant as it approaches its most important time of the year: its annual September iPhone launch followed by the holiday season. Apple will also dodge incoming new tariffs on semiconductors, since it's committed to building iPhone components in the United States, Trump said Wednesday.
That's not to say tariffs won't hurt; CEO Tim Cook said tariffs will likely cost the company $1.1 billion this quarter. But analysts say Apple has bigger concerns, such as its future product strategy and approach to artificial intelligence, a burgeoning field that the tech behemoth is perceived to be behind in.
Under different circumstances, such high tariffs could have spelled trouble for Apple. The iPhone is Apple's most important product, making up the majority of its revenue. Most iPhones sold in America come from India. And the Americas, which includes the United States, is Apple's largest market.
"In terms of the longer-term issues, more than a year out, I would say tariffs are probably 20% of it," said Gene Munster, managing partner at Deepwater Asset Management, who has covered Apple for decades. "I think what's going on the regulatory environments (is) probably 25%, and 55 is related to how they're going to capitalize on AI."
Tariffs are a challenge for Apple, but one that analysts seem confident the company can manage. A combination of Apple's diversified supply chain - which it partially shifted to areas like India and Vietnam around five years ago to reduce reliance on China during COVID - along with its high margins and Cook's operations expertise put the company in a strong position.
Supply chain resilience is "supposed to allow you to adjust tactically to any major changes that comes unexpected," said Runar Bjørhovde, a research analyst for market research firm Canalys.
That held true even before Apple committed to investing an additional $100 billion in the United States to manufacture iPhone parts domestically on Wednesday.
While moves like these don't directly impact tariff policy, they do likely help Apple curry favor with the administration, especially as Trump has pressed Apple to build its iPhones domestically.