Apple is left without a life raft as Trump’s China trade war intensifies, analysts warn
People shop at an Apple store in Grand Central Station in New York on April 4, 2025.
Michael M. Santiago | Getty Images
Though U.S. President Donald Trump’s 90-day pause on many of his “reciprocal tariffs” has given some firms and investors respite, America’s largest company, Apple, hasn’t been so lucky.
The Cupertino-based tech giant is heavily reliant on supply chains in China, which has seen its levies only continue to ramp up, with the U.S.’ cumulative tariff rate on Chinese goods now standing at 145%.
Thus, despite the U.S. trade situation looking more promising for much of the world, experts say that U.S.-China negotiations remain the most important variable for Apple.
“Apple could be set back many years by these tariffs,” Dan Ives, global head of technology research at Wedbush Securities, told CNBC, adding that the company had “had their boat flipped over in the ocean with no life rafts.”
The smartphone maker has been diversifying its supply chain from China for years, but out of the 77 million iPhones it shipped to the U.S. last year, nearly 80% came from China, according to data from Omdia.
The tech-focused research firm estimates that under current tariffs, Apple could be forced to increase its prices on phones sold to the U.S. from China by around 85% in order to maintain its margins.
“When the original China tariffs were at 54%, that kind of impact was serious, but manageable … but, it wouldn’t make financial sense for Apple to raise prices based on the current tariffs,” said Le Xuan Chiew, research manager at Omdia.
Few options
Apple reportedly shipped 600 tons of iPhones, or as many as 1.5 million units, from India to the U.S. before Trump’s new tariffs took effect, according to Reuters and The Times of India.
Apple and two of its iPhone producers did not respond to a CNBC inquiry.
Chiew said while this news is unconfirmed, stockpiling would’ve been the best option for the company to quickly mitigate the tariff impacts and buy themselves some time.
However, it’s not clear how long such stockpiles could last, especially as consumers increase iPhone purchases in anticipation of higher prices, he added.
According to Omdia, Apple’s medium-term strategy has been to reduce exposure to geopolitical and tariff-related risks, and it has appeared to focus on increasing iPhone production and exports from India.
Trump’s temporary halt will likely push tariffs on India to a baseline of 10% — at least for now — giving it a more favorable entry into the U.S.
However, the build-up of iPhone manufacturing in India has been a yearslong process. Indian iPhone manufacturers only began producing Apple’s top-of-the-line Pro and Pro Max iPhone models for the first time last year.
According to Chiew, ramping up enough production in India to satisfy demand could take at least one or two years and is not without its own tariff risks.
Exemptions?
In face of the tariffs, experts said the company’s best option is likely to appeal to the Trump administration for a tariff exemption for imports from China as it continues to ramp up its diversification efforts.
This is something the company had received — to an extent — during the first Trump administration, with some analysts believing it could happen again this time around.
“I still see some potential relief that can come in the form of concessions for Apple based upon its $500 billion U.S. commitment,” said Daniel Newman, CEO of The Futurum Group. “This hasn’t been discussed much — but I’m optimistic that companies that commit to U.S. expansion may see some form of relief as negotiations progress.”
Apple said in February that it would invest $500 billion in the U.S., creating 20,000 jobs.
Still, Trump has been clear that he believes Apple can make iPhones in the U.S.— though analysts have doubts about the plan. Wedbush analyst Ives has predicted that an iPhone would cost $3,500 if produced in the U.S. instead of the more typical $1,000.
Meanwhile, other analysts say that even a trade deal or tariff exemption may not be enough for Apple to avoid adverse business effects.
“Let’s assume that there is at least some thaw coming, either in a moderation of reciprocal tariffs targeting China or in a special exemption for Apple,” said Craig Moffett, co-founder and senior analyst at equity research publisher MoffettNathanson.
“That still wouldn’t solve the problem. Even a 10% baseline tariff poses an enormous challenge for Apple.”
Sam Altman, CEO of OpenAI, is seen through glass during an event on the sidelines of the Artificial Intelligence Action Summit in Paris, Feb. 11, 2025.
Aurelien Morissard | Via Reuters
Elon Musk tried to derail a major artificial intelligence infrastructure deal in the Middle East after learning that his startup, xAI, would be excluded from the initiative, CNBC has confirmed.
Earlier this month, OpenAI, Oracle, Nvidia, Cisco and Emirati firm G42 announced plans to build a sweeping Stargate AI campus in the United Arab Emirates. Musk was frustrated that OpenAI, led by personal rival Sam Altman, was tapped for the deal, and he intervened in an effort to get xAI involved, said a person familiar with the matter who asked not to be named in order to speak freely.
Musk argued that President Donald Trump would not approve the deal, the person said. The announcement was delayed by several days as stakeholders, including the White House, dealt with blowback from Musk, who has been engaged in a public and legal spat with Altman and OpenAI.
The Wall Street Journal first reported that Musk attempted to block the deal.
In a statement to CNBC, White House press secretary Karoline Leavitt didn’t mention the dustup.
“The United States and the UAE signed a groundbreaking framework agreement establishing the first AI acceleration partnership,” Leavitt said. “The framework advances the buildout of AI infrastructure in the United States and the UAE. This was another great deal for the American people, thanks to President Trump and his exceptional team.”
Musk wasn’t in the UAE when the deal was signed, but was with the president in Saudi Arabia during an earlier part of the Middle East trip, according to a senior White House official. The official said Musk has relayed his concerns about the government fairly treating all AI companies.
OpenAI declined to comment. Musk didn’t respond to CNBC’s request for comment.
Musk, who is also CEO of Tesla and SpaceX, is a complicating character in Trump’s effort to solidify U.S. leadership in AI. Musk spent close to $300 million to send President Trump back to the White House, and has since been leading the Department of Government Efficiency (DOGE), slashing the size of the federal workforce. His time as a special government employee is coming to an end this month.
When it comes to AI, Musk has in recent years been a vocal critic of Altman, a former friend and colleague. The pair helped form OpenAI as a research lab in 2015, but Musk later had a public break with the project and has consistently criticized its structure and close alliance with Microsoft.
While xAI has been building its commercial efforts, acquiring Musk’s social media company X in March and this week partnering with Telegram to roll out its Grok chatbot, Musk has been trying to thwart OpenAI’s effort to convert into a for-profit entity.
Musk has sued OpenAI for breach of contract and to try and stop the conversion, and a Musk-led investor group made an unsuccessful bid to buy control of the startup for $97.4 billion in February.
It’s also not the first time Musk has been critical of Stargate.
In January, Trump unveiled the Stargate project, with OpenAI, Oracle and Softbank committing an initial $100 billion, and up to $500 billion, of investment in AI infrastructure in the U.S. over four years. Musk was quick to cast doubt on the financing behind the project.
“They don’t actually have the money,” Musk wrote in response to an OpenAI post on his social platform X. He later added that SoftBank had “well under” $10 billion secured.
Two months later, SoftBank led a $40 billion investment in OpenAI at a $300 billion valuation.
— CNBC’s Eamon Javers contributed to this report.
WATCH: Elon Musk tried to block Sam Altman’s big AI deal in the UAE
A Dell Technologies sign is seen in Round Rock, Texas, on June 2, 2023.
Brandon Bell | Getty Images
Shares of Dell Technologies rose on Thursday in extended trading after the company raised its full-year earnings forecast and issued a stronger-than-expected forecast for the current quarter.
However, Dell’s adjusted earnings per share came up short versus LSEG estimates on in-line revenue.
Here’s how the computer maker did versus LSEG consensus estimates:
- Earnings per share: $1.55 adjusted vs. $1.69 estimated
- Revenue: $23.38 billion vs. $23.14 billion estimated
Dell said it expects $2.25 in adjusted earnings per share for the current quarter, with between $28.5 billion and $29.5 billion in revenue. That was significantly higher than LSEG expectations.
Company officials attributed the strong guidance to $7 billion in artificial intelligence systems that are expected to ship during the quarter, which are higher-margin than other Dell systems.
For the full year, Dell still expects about $103 billion in revenue, in line with LSEG expectations, but it raised its forecast for full-year adjusted earnings to $9.40, which was a 10 cent increase from the company’s prior outlook.
Dell is one of Nvidia’s primary vendors that builds systems around the chipmaker’s AI graphics processing units. Dell said on Thursday that it was seeing “unprecedented demand” for AI systems, especially for second-tier cloud providers, such as Coreweave.
Texas-based Dell said that it has $14.4 billion in confirmed orders for AI systems in its backlog that will ship in the coming quarters. It recorded $12.1 billion in confirmed AI orders during the first quarter, the company said. These numbers will turn into recorded revenue when Dell ships the system to its clients. In February, Dell said it expected $15 billion in AI server sales during its fiscal 2026, up from $10 billion last year.
Overall, Dell’s revenue grew 5% on an annual basis. It said it expects revenue to grow 8% during the fiscal year.
Dell’s server business is reported as part of its Infrastructure Solutions Group, which had $10.3 billion in sales during the quarter, a 12% rise. Of that, $6.3 billion was sales for servers and networking, and $4 billion was for computers that store data.
The company’s laptop and PC business, its Client Solutions Group, recorded $12.5 billion in sales as the global PC market is expected to recover this year after several slumping years.
The computer maker also said it significantly stepped up its shareholder capital return during the quarter, spending $2.4 billion on share repurchases and dividends during the period. It spent $2.58 billion on share repurchases for all of its fiscal 2025, which ended in January.
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