Apple’s Gross Margin May Drop 9% Due to Trump’s Tariffs; Analyst Suggests Strategies to Mitigate Financial Impact

The global economy is on the brink of transformation, particularly as U. S.President Donald Trump has revealed a suite of tariffs set to target multiple regions. This development poses significant challenges for major corporations like Apple, which rely heavily on established supply chains in these affected areas. Analysts are predicting that if Apple maintains its current pricing structure, it could face a steep decline in gross margins, potentially by as much as 9 percent, which would have dire financial implications. Recent insights suggest strategic actions Apple can undertake to mitigate these impacts.

Analyst Recommendations for Apple: Focus on India and Adjust Pricing Strategy

Numerous analysts have provided guidance on how technology firms can navigate the looming financial repercussions. Ming-Chi Kuo from TF International outlines five critical strategies specifically tailored for Apple to weather this storm. One of the primary recommendations involves substantially increasing iPhone production in India. Should India succeed in obtaining tariff exemptions through new trade agreements with the U. S., Kuo suggests Apple should aim to elevate its production output in the region to 30 percent of its global total.

While Apple is likely to incur some losses, this shift could help shrink the adverse effect on its gross margins from a potential 3 percent down to just 1 percent. Additionally, Kuo advises that Apple should raise prices for its ‘Pro’ iPhone models—especially since these variants contribute to 65 to 70 percent of the revenue from new releases. Although specific pricing adjustments for the iPhone 17 Pro and iPhone 17 Pro Max have not been disclosed, the recommendation remains vital for company strategy.

Other measures suggested by Kuo include reducing trade-in valuations, increasing carrier subsidies, and urging suppliers to explore cost-reduction strategies. The cumulative effect of these actions may provide Apple a buffer against the impending financial strain.

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…

— Ming-Chi Kuo (@mingchikuo) April 3, 2025

To summarize, Trump’s proposed tariffs could surge up to as high as 46 percent. However, there remains the possibility that the U. S.government may reconsider these figures if the affected regions can present compelling counterproposals. Observers are keen to see if Apple CEO Tim Cook will secure a meeting with President Trump to discuss the company’s $500 billion investment commitment, using it as leverage against the imposition of such steep tariffs on critical manufacturing locations.

For more insights, visit: Ming-Chi Kuo

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