The issue of reciprocal tariffs proposed by US President Donald Trump continues to escalate, affecting not only the economic and industrial development of various trade partners but also creating operational challenges for domestic companies. Taking Apple as an example, the company faces risks such as rising costs, declining sales, and potential supply chain disruptions due to relocations of components and manufacturing for its hardware products, including the iPhone. Additionally, with services now being Apple's second-largest revenue source, any barriers to service trade imposed by other countries in retaliation could further hamper Apple's operations.
According to the latest financial report released by Apple, the iPhone series remains a primary revenue driver, contributing US$69.1 billion in revenue during the fourth quarter of 2024, accounting for nearly 55.6% of total revenue. Services revenue, which includes purchases from the App Store, advertising, payments, AppleCare support, and other subscriptions, reached US$26.3 billion, making up 21.2% of total revenue and establishing services as Apple's second major operational pillar.
Geographically, the Americas contribute approximately 40% of Apple's revenue, while Europe and Greater China each account for nearly 20%.
Trump recently announced high reciprocal tariffs on regions including China, Vietnam, India, and Taiwan, with Japan and South Korea also affected. Even though Trump abruptly postponed his tariffs on most nations for 90 days, countries subject to the pause are now being tariffed at 10%, while the tax rate on Chinese imports has been raised to 145%.
Without relief, Apple will face increased component costs and eroded profits. Currently, Apple's ambition to establish a complete ecosystem for mobile parts and assembly in the US seems unrealistic. However, the pressure related to "Make America Great Again" (MAGA) and the return of manufacturing persists, remaining a significant challenge for Apple's operations.
Furthermore, statistics indicate that the service industry accounts for about 77% of the US GDP, with service trade exports reaching US$900 billion in 2024, representing 30% of global service trade. This includes sectors like social media, advertising, travel, financial services, cloud computing, and entertainment. Countries such as Canada, China, Japan, Mexico, Taiwan, Singapore, and the UK all have substantial service trade surpluses with the US.
Article edited by Jerry Chen
