Apple Stockpiles Inventory to Combat 145% Tariff Hike

Apple Inc. has been actively stockpiling inventory for the U.S. market since the start of the Lunar New Year this year, aiming to mitigate the impact of import tariffs. The company currently holds more than two months' worth of inventory, which is expected to minimize the impact of tariffs on its second-quarter 2025 sales in the U.S. market. However, this strategy of pulling forward shipments to build up inventory has its own set of challenges for the supply chain. The transition between new and old iPhone models could be disrupted, potentially leading to inefficiencies and increased costs. Despite these efforts, import tariffs remain a significant pressure point for Apple, as the company continues to navigate the complexities of global trade policies. The company's ability to manage these challenges will be crucial in maintaining its competitive edge and ensuring the smooth operation of its supply chain.

Analyst Ming-Chi Kuo has pointed out that the U.S. has reduced the tariff rate on iPhone imports from 145% to the original 20%, which appears to ease market tensions. However, this reduction does not significantly alleviate the pressure on Apple, as evidenced by the company's decision to start stockpiling inventory for the U.S. market since the Lunar New Year. The unpredictable nature of U.S. tariff policies, particularly under the Trump administration, remains a significant source of uncertainty for Apple's supply chain. The company must continue to monitor potential tariff changes and adjust its strategies accordingly to minimize disruptions and maintain its competitive position in the market.

Kuo also highlighted that the production lines in China responsible for manufacturing iPhone models for the U.S. market remain idle, indicating that the plan to shift production entirely to India starting from the second quarter of 2025 remains unchanged. However, production is a dynamic process, and this situation requires continuous observation. The unpredictable tariff policies of the Trump administration are the biggest source of uncertainty for iPhone supply in the near term. While tariff changes may temporarily affect stock prices, the long-term investment trend will depend on Apple's preparedness for geopolitical risks, the competitiveness of the iPhone, and the overall economic outlook.