US President Trump announced on Wednesday (2nd) that the United States and Vietnam reached a trade agreement to impose new tariffs on goods imported from Vietnam, which is expected to have a certain impact on Apple. Apple has transferred most of its manufacturing business to Vietnam in recent years to avoid US-China trade frictions. Now products including AirPods, iPads, Mac minis and other products will face a surge in tariff costs, with the tax rate from 4% to at least 20%.
Many foreign media reported that the Trump administration promoted the so-called “reciprocal tariff” policy, emphasizing that US products will have zero tariffs to enter the Vietnamese market. In contrast, the United States imposes a 20% import tariff on Vietnamese goods (far lower than the 46% tax rate announced on April 9 this year).
Trump claimed on the social platform Truth Social that this move is beneficial to the US, but in fact, it will increase operating costs for companies such as Apple.
Apple CEO Cook said as early as May this year that most Apple devices will be imported from Vietnam except for iPhones.
Products currently produced in Vietnam include AirPods, Apple Watch, iPad, Mac mini and some MacBook Pro models. Once the new tax rate is on the road, these devices will all be subject to a 20% tariff.
The report pointed out that in addition to the 20% basic tax rate, the Trump administration sets up another 40% “transport tariff” to target goods that are not from Vietnam but are processed or assembled by Vietnam and exported to the United States.
Although Apple uses components from the global supply chain in the assembly process in Vietnam, preliminary analysis does not apply to this higher tax rate.
However, UBS analyst David Vogt released the latest report pointing out that although the tariff measures undoubtedly increase Apple’s import costs, considering that the revenue share of Vietnam’s production lines is relatively low and that most of the products are in non-core categories. Even if Apple won’t get tariff exemptions like Trump did in his first term, this will only have a slight negative impact on Apple’s profit margins.
Vogt pointed out that since Apple’s main product, the iPhone, is not produced in Vietnam, and Vietnam’s contribution to total revenue is relatively low, even if the tariffs officially take effect, the pressure on its gross profit margin is expected to be slight.
“Considering Apple’s production scale and product composition in Vietnam, the 20% import tax has negligible impact on gross profit margins. As iPhones are still produced in China and India, Apple’s supply chain in Vietnam accounts for a relatively small proportion.”
According to Apple’s 2024 annual financial report, its annual revenue reached US$391 billion, of which iPhone contributed more than US$200 billion. In comparison, the revenue of Vietnamese product products such as iPad, Mac and wearable devices was US$26.7 billion, US$30 billion and US$37 billion, respectively, accounting for a relatively low proportion of overall revenue.
“Vietnam exports Apple products to the United States account for only a small part of total revenue, so even if tariffs are imposed, it will only cause a limited impact.”
Apple has become one of its focus as Trump promotes the return of manufacturing industry. Trump has repeatedly called on Apple to move its iPhone production line back to the United States. Faced with rising production costs and geopolitical risks in China, Apple has gradually moved its supply chain out. Although it has not turned to the United States, it has been scattered to India, Vietnam and other places.
“We expect most iPhones sold in the U.S. in the second quarter of 2025 will come from India, while almost all iPads, Macs, Apple Watch and AirPods come from Vietnam,” Apple CEO Tim Cook said on a May earnings call.
Apple (AAPL-US) closed 2.22% on Wednesday at $212.44 per share, down 12.88% year to date.
