Apple Stock Rises as US Judge Blocks Trump’s Reciprocal Tariffs todayheadline

Apple stock (NYSE: AAPL) is trading over 2% higher in US premarket price action and looks set to re-enter the $3 trillion market cap club after a US judge blocked President Donald Trump’s reciprocal tariffs.

While the tariffs were a challenge for many companies, Apple was the worst affected among its “Magnificent 7” peers. Apple sources nearly all of the products it sells in the US from international markets and was the worst affected by the tariff uncertainty.

Tariffs Are a Challenge for Apple

Apple finds itself in the crosshairs of the trade war. While President Trump exempted smartphone and tech products from the 125% reciprocal tariffs that he imposed on China, they were still subject to the 20% fentanyl-related tariffs that he previously announced. Moreover, after the trade talks earlier this year, both China and the US cut their respective reciprocal tariffs to 10%, which means that Chinese imports attracted a 30% duty in the US.

During its fiscal Q2 2025 earnings call last month, Apple said that for US sales, it will source almost all of its iPhones from India and other products like Mac and iPads from Vietnam in the coming months. The company sidestepped the question on a potential price hike due to the tariff but warned of a hit of $900 million from tariffs in the current quarter.

While Apple was looking to somewhat offset Trump’s tariffs by sourcing iPhones from India, which attracted only a 10% tariff, last week, the President warned the Cupertino-based company of a 25% tariff if it does not manufacture these in the US.

Trump Warned Apple Against Moving iPhone Production to India

“I have long ago informed Tim Cook of Apple that I expect their iPhone’s that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else. If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S,” said Trump in a post on Truth Social.

Meanwhile, while the reprieve from reciprocal tariffs has come as a relief to Apple whose stock has underperformed Big Tech companies this year, it remains to be seen if Trump uses other tools to impose tariffs after the U.S. Court of International Trade ruled that he exceeded his authority by invoking the International Emergency Economic Powers Act.

OpenAI’s Hardware Foray Is a Risk for Apple

In what could be a challenge to Apple, OpenAI is looking to foray into the hardware space with its $6.4 billion acquisition of io Products. The startup was founded last year only by Jony Ive, who is credited with designing several Apple products, including the iPhone.

In a post on X, Gene Munster of Deepwater Asset Management wrote, “Tech shifts like the internet, the smartphone, and AI only happen once in a generation. OpenAI is catalyzing this shift into something tangible.”

Ha added, “Before AI, there was no real threat to Apple’s or Google’s business. The emergence of AI, led by OpenAI, has created the first serious threat in 20 years.”

Notably, Apple’s artificial intelligence (AI) initiatives haven’t really taken off. While the company launched its “Apple Intelligence” features last year, they have failed to move the needle

Moreover, Apple hasn’t been able to come up with a product like the iPhone in years. The company did design the Vision Pro headsets, but the sales of the $3,500 gadget have been tepid at best.

Reports suggest that Apple might be working on AI-powered glasses that could have built-in speakers and microphones. However, it remains to be seen whether that product can be the next major computing platform and, importantly, fend off competition from Meta Platforms’ smart glasses as well as hardware products that OpenAI might launch.

AAPL’s Services Business Also Faces Headwinds

Separately, Apple’s Services business, which is the company’s most profitable segment, is also facing regulatory heat. A US federal judge ruled that Apple needs to allow competition in the App Store.

While Apple does not break down the revenues that it receives through the App Store fees, they are part of its hugely profitable Services business, whose gross margins are about twice that of the product business. The segment reported record revenues of $26.6 billion in the March quarter, which were up 12% YoY despite adverse currency movements. Notably, while in previous quarters, Apple used to provide some color on the segment’s revenue guidance, it refrained from doing so, citing “uncertainty from several quarters.”

Apple Allowed Epic Games App After Court Order

Meanwhile, Apple finally approved the Epic Games App on its US App Store. The company had removed the popular gaming app in 2020 after the game’s publisher tried using third-party payment mechanisms.

Apple has warned of a hit of “hundreds of millions to billions” due to the proposed rules. Notably, Apple had to allow third-party app stores in the European Union under the region’s Digital Markets Act.

AAPL’s Partnership With Google Faces Regulatory Scrutiny

Apart from the dispute over the App Store fees, Apple is also facing the heat over its exclusive deal with Alphabet, wherein Google is the default search engine on iPhones. Apple earns around $20 billion annually as part of the deal, and regulators want Google to end such exclusive agreements.

Replying to a question about US Department of Justice’s case against Google, Tim Cook said during the Q2 earnings call, “that case is ongoing and I don’t really have anything to add beyond that. And so, we’re monitoring these closely. He, however admitted, “there’s risk associated with them and the outcome is unclear.”

Finally, Apple’s business in China is also facing challenges from domestic players. Apple lost its position as the biggest smartphone seller in China last year and fell to the third spot as domestic Chinese rivals gained market share at the iPhone maker’s cost. Vivo was the top-selling brand in the world’s second-biggest economy last year, followed by Huawei, whose sales have surged over the last two years.