Apple Inc (NASDAQ:AAPL, ETR:APC) has avoided immediate fallout from new US-China tariffs, but future sector-specific duties could pose moderate earnings risk, Bank of America said Monday.
Consumer electronics, including Apple products, are temporarily exempt from the newly announced 125% reciprocal tariffs, leaving Chinese imports subject to a 20% rate and Indian imports at 0%.
Still, the Trump administration has signaled that electronics will be included in upcoming sectoral tariffs.
BofA estimates the current tariff setup would reduce Apple’s 2026 EPS by $0.41, or 4.9%, if the company absorbs the full cost without raising prices – far less severe than the prior $3.13, or 36.9%, EPS hit under the originally proposed tariff rates.
If Apple raises US prices by 10% with 5% fewer units sold, the impact narrows further to $0.11, or 1.2%.
“We believe Apple is well positioned to navigate the tariff headwinds,” analysts wrote, citing strong margins, cash flow, and capital returns. “Apple may be seen as a relative safe haven.”
The bank said Apple could mitigate risks through strategies like raising product or services prices, optimizing supply chains, or altering its product release cadence.
Apple plans to manufacture 15 million iPhones in India for US export, avoiding tariffs on those units. However, about 35 million iPhones and all iPads and Macs sold in the US would face the 20% tariff.
Assembling iPhones in the US?
While a full shift of iPhone manufacturing to the US remains unlikely in the near term, Bank of America suggests the idea is not entirely out of reach.
“We estimated that it would cost roughly 25% more to make an iPhone in the US relative to China for just labor differential and no component tariffs,” the analysts said.
While components would still largely be sourced from Asia, the analysts noted that increased automation and a move away from annual product releases could help Apple manage the cost differential.
Shares of Apple came down slightly on Monday morning but were still trading around 2.1% higher at midday.