On February 21, CNBC reported that Apple’s cumulative tariff expenditures per quarter were approximately US$1 billion, but this number is expected to begin to decline after the Supreme Court’s ruling on the tariff issue. On Friday local time, the U.S. Supreme Court announced a ruling that the large-scale tariff policy implemented by the Trump administration invoking the International Emergency Economic Powers Act was illegal. This was a major rejection of Trump's key economic policies.

Apple has paid about $3.3 billion in tariffs since Trump imposed tariffs last year. Apple shares rose about 1% on Friday.

cost reduction

Friday's ruling means Apple may start to see lower production costs and be able to maintain higher profit margins. The company will also face less pressure to move production out of China or streamline its supply chain.

Apple's high tariff costs stem from the U.S. government's import tariffs on products and components made overseas, particularly from China and other Asian partners such as Vietnam and India.

In May last year, when Apple CEO Tim Cook outlined plans to deal with tariffs, he said that half of the company's iPhones sold in the United States were purchased from India, while most other products sold in the United States (such as Macs, AirPods and watches) were purchased from Vietnam. At that time, these two countries had lower tariffs than China.

Friday's ruling removes Trump's tariffs on goods produced in China, which stood at 47% as of December. This also allows Apple to produce more products sold in the United States in China instead of having to move them to India and Vietnam. Previously, most of Apple's products sold to countries outside the United States were purchased in China.

Cook once emphasized on the conference call that in order to avoid customers facing sudden price increases, Apple is basically absorbing the cost of tariffs on its own.

Is there any refund?

After the U.S. Supreme Court voted 6-3 to rule that Trump's unilateral tariff increases were illegal, the U.S. government may need to refund more than $175 billion in tariffs to importers.

A key question is whether Apple will aggressively seek to recoup the tariffs it has paid or choose to absorb the costs itself to avoid upsetting Trump.

At a press conference on Friday afternoon, Trump, speaking about the Supreme Court's ruling, stopped short of committing to refunds to U.S. companies that had paid tariffs and predicted years of "litigation" over refunds.

The tariffs have tested the relationship between the country's commander-in-chief and the CEO of one of the world's most valuable companies. The once strong relationship between Trump and Cook began to crack over the idea of ​​producing iPhones in the United States. Last May, Trump said he had a "little problem" with Cook and threatened to impose a 25% tariff on iPhones.

Then Cook launched a charm offensive. In August, he appeared at the White House with Trump and announced plans to invest approximately $600 billion in the United States over the next four years. Apple also pledged to source components and expand partnerships with U.S. suppliers.

Cook presented Trump with a custom engraved glass plaque with a 24-karat gold base. Last month, Cook attended a White House screening of "Melania," the documentary about first lady Melania Trump.

uncertainty

Although the U.S. Supreme Court ruled on Friday, there are still variables on the tariff issue, and there are still many questions about its impact on companies such as Apple.

Just hours after the U.S. Supreme Court rejected Trump's reciprocal tariffs, Trump said he would sign an executive order imposing new "global tariffs" of 10%. He cited Section 122 of the Trade Act 1974 to implement the measure. The tariffs imposed by this provision are only valid for 150 days, and any extension would require congressional approval.

Trump also said that the government is launching multiple investigations into possible unfair trade practices in accordance with Section 301 of the Trade Act, which may result in the imposition of new additional tariffs.

As of press time, Apple had declined to comment.