The most anticipated part of Apple’s Thursday earnings won’t be iPhone sales or Mac forecasts – it’ll be CEO Tim Cook’s comments on how the company is dealing with President Donald Trump’s tariffs. 

Apple is one of the most exposed companies to Trump’s tariffs and expected retaliation. It makes about three-quarters of its overall revenue from physical goods — iPhones, Macs and Apple Watches — mostly made in China or elsewhere in Asia. And the U.S. is its largest market.

“It’s how Apple responds to ‘everything else’ that will set the tone for post-earnings sentiment,” wrote Morgan Stanley analyst Erik Woodring in a Monday note.

He has an overweight rating on the stock, and wants to hear what Cook and Apple finance chief Kevan Parekh have to say about how the company is mitigating supply chain and tariffs risks, if Apple will raise prices or eat costs, and the status of Cook’s relationships with Trump and Chinese President Xi Jinping.

Apple hasn’t commented on the hefty tariffs Trump announced for every country in the world on April 2, but they represent a deep threat to the iPhone maker’s supply chain and sent the company’s share price down 9%. 

“We are monitoring the situation and don’t have anything more to add than that,” Cook said during Apple’s January earnings call. Those were the company’s most recent comments on Trump’s trade policy.

Apple is perhaps the highest-profile example of a company that’s gotten caught up in Trump’s trade war. 

It’s the most valuable U.S. company, hundreds of millions of Americans own iPhones and Cook built his reputation in Silicon Valley as an operations expert who keeps Apple’s inventory low and its logistics tight.

But Apple and Cook have stayed tight-lipped publicly even as Trump administration officials called for the company to move iPhone production to the U.S., imagining millions of Americans “screwing in little screws” to build the devices.

The White House suggested that Apple was capable of building iPhones in the U.S., something that many analysts said is impossible at worst and would result in a $3,500 iPhone at best. 

“I speak to Tim Cook. I helped Tim Cook, recently, and that whole business,” Trump said in an oval office briefing earlier this month after he delayed the highest-tariffs on non-China nations for 90 days. It was a move that boosted Apple stock. Cook has maintained a line of communication with the Trump administration, according to Trump, dating back to his first term.

Now it’s time to hear from Apple itself. 

The tariffs are a material issue that will eventually affect the company’s financials. TD Cowen predicts that the current tariffs will cost Apple about 6% of its annual earnings this year. Apple reported about $94 billion in profit in its fiscal 2024.

It’s not just investors that want a peek into Apple’s thinking — Sen. Elizabeth Warren, D-Mass., questioned Cook about what he discussed with the Trump administration ahead of the president’s decision to pause tariffs on non-China nations.

Apple’s share price remains lower than it was on April 2, even though analysts have said the pause will give Apple some flexibility to avoid the highest tariffs, thanks to its production locations in India and Vietnam.

Several recent reports have said that Apple will try to source as many iPhones as possible from from India, which only faces a 10% tariff, to avoid the highest 145% tariffs on China. But although Apple has been ramping up iPhone production in India since 2017, the company has only recently begun to ship commercially significant quantities in recent years, and Apple hasn’t confirmed the pivot to India or discussed its Indian production capabilities.

“While it’s possible for all 25 million of India capacity to be allocated to the US near-term, we think it could take approximately a year for production to double to 50 million overall,” TD Cowen analyst Krish Sankar wrote Monday, saying that Apple is expected to sell between 65 million and 70 million iPhones in the U.S. this year.

Apple declined to comment on sourcing iPhones to the U.S. from India.

Another closely-watched metric will be Apple’s China revenue, which could indicate if rising nationalism will hurt iPhone sales in the company’s third largest market, which includes Hong Kong and Taiwan.

Some analysts have noted that the smartphone owners in China are more likely to switch phone brands than Western consumers. There’s concern that now those Chinese consumers could take cues from media and government officials and buy Chinese phone brands, such as phones made by Huawei.

Dipanjan Chatterjee, principal analyst at Forrester, said that if Apple were to move a lot of production out of China, it would also have to consider if that could upset the Chinese consumer.

“If Apple is going to pull production out of China, that’s not going to go down well in that market,” Chatterjee said. “They’re going to hedge. You’re going to see a lot more saying and a little bit of tinkering and not a whole lot of doing.”

Analysts polled by FactSet expect Apple to report $1.62 in earnings per share on $94.19 billion in sales, which would be an almost 4% revenue increase on an annual basis.

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