The near-universal 10% tariffs enacted by Trump have been declared illegal, pending appeal, so Apple could benefit from even deeper cost reductions throughout its supply chain and additional refunds.
The so-called “Liberation Day,” April 2, 2025, hit Apple’s supply chain like a ton of bricks. A year later, these “reciprocal” tariffs were declared illegal and new global tariffs were immediately put in place.
President Trump attempted to use a novel provision to enact 10% tariffs without Congressional approval, but it backfired. On Thursday, the International Trade Court ruled that these new global tariffs were also illegal.
Section 122 of the Trade Act of 1974 allowed a sitting president to enact tariffs of up to 15 percent for 150 days. It was supposed to be used in response to “balance of payments” problems, according to the New York Times.
Lawsuits followed, and the courts were quick to conclude that these extensive tariffs were also illegal. This is another blow to the administration after previous tariffs were struck down in February by the Supreme Court.
Trump has long claimed that illegal tariffs were put in place to balance “unfair” deficits created by other countries’ trade. Instead, the billions collected must be returned to the companies that paid for them.
The end result was a tough year for U.S. portfolios.
How Tariffs Affect Apple
Apple is a global company with a giant supply chain that ships products everywhere. Any universal pricing automatically reduces Apple’s margins or requires prices to change somewhere.
Fortunately, so far, Apple CEO Tim Cook’s actions have buttered up Trump and earned them some exceptions. Apple never raised its prices to fight the tariffs and will now use the refunded money to invest in the United States.
It’s unclear what the next step is for the Trump administration beyond an appeal. If the decision stands, it could mean a return to sanity in global trade.
Tariff rates could finally return to an average of around 2.7% for Apple, as they did under the Biden administration. Consumer goods could also see their prices fall thanks to the end of the trade war.
Exactly how this decision will affect Apple cannot be predicted. This should mean revenue recovery and wider product margins.
For Trump, this is bad news as he heads to China to discuss trade with Xi Jinping. Losing illegal tariffs as leverage could hurt negotiations, but Cook will be there with other leaders as part of a power play.