Apple, Samsung, and Microsoft adjust supply chain and pricing strategies in response to U.S. tariffs and global inflation pressures.

Taiwan • Business • 05/02 19:32
Apple, Samsung, and Microsoft adjust supply chain and pricing strategies in response to U.S. tariffs and global inflation pressures.

Apple, Samsung, and Microsoft are adjusting their supply chains and pricing strategies in response to U.S. tariffs and global inflation pressures. Apple is moving the production of iPhones for the U.S. market to India, shifting the production of iPads and other products to Vietnam, and sourcing chips from TSMC's U.S. facilities. Samsung is considering increasing product prices in the U.S. market due to tariff impacts. Microsoft has already raised the global prices of Xbox consoles and accessories to account for rising development costs.

Key Updates

05/03 16:31

Warren Buffett criticized the Trump administration's tariff policy at the Berkshire Hathaway shareholders meeting in Omaha.

In early May 2025, Warren Buffett criticized the trade policies of former U.S. President Donald Trump at the Berkshire Hathaway annual shareholders meeting in Omaha, Nebraska, accusing him of weaponizing trade, thereby harming global market stability and international relations. Buffett emphasized that trade should foster prosperity and peace, rather than conflict. He warned that tariff policies could have long-term detrimental effects on U.S. interests and reiterated his long-term confidence in the global economy.

05/03 11:02

The United States Removes Duty-Free Privileges for Low-Value Goods from China and Hong Kong, Tariffs Rise to 145%: Temu and Shein Revise Their Business Strategies in Response

On May 2, 2025, the United States ended the duty-free exemption for small parcels under $800 from China and Hong Kong, resulting in tariffs that could reach as high as 145%. This policy has a significant impact on global e-commerce, especially affecting companies like Temu and Shein that rely heavily on the Chinese supply chain. Temu is shifting its focus towards local warehousing and sourcing, while Shein is adjusting its pricing strategy. Several retailers have suspended sales to the U.S., highlighting the challenges the market faces in adapting to the new tariff policy.

05/03 07:29

The United States will remove the 25% tariff on auto parts from Canada and Mexico starting May 3, 2025: aiming to stabilize the North American supply chain and reduce production costs.

On May 3, 2025, the United States exempted auto parts from Canada and Mexico from a 25% import tariff, in accordance with the rules of origin under the United States-Mexico-Canada Agreement (USMCA). This move helps stabilize the North American automotive industry and lays the foundation for renegotiating the USMCA. In response to the Trump administration's global tariffs on auto parts, this exemption helps maintain the North American supply chain and control production costs.

05/03 03:30

Pepsi Faces Tariff Challenges: Rising Costs of Concentrate and Aluminum Imported from Ireland, Coca-Cola is Less Affected

In April 2025, President Donald Trump implemented a new tariff policy, placing supply chain and cost pressures on PepsiCo. PepsiCo's soda concentrate imported from Ireland is subject to a 10% tariff, and the tariff on aluminum has been increased to 25%, leading to increased operating costs for PepsiCo in the U.S. market. In contrast, Coca-Cola is less affected because of its reliance on a domestic supply chain. This tariff policy heightens the competition between these two major brands and underscores the fragility of the global supply chain.

05/03 02:00

The American Footwear Association warns Trump about the threat of tariffs, as 76 brands, including Nike, request exemptions to avoid inventory shortages and price increases.

On April 29, 2025, the Footwear Distributors and Retailers of America (FDRA), representing 76 brands including Nike and Adidas, sent a letter to former President Trump requesting an exemption from the high import tariffs on countries including China, Vietnam, and Cambodia, with tariff rates ranging from 145% to 220%. The FDRA warned that these tariffs would threaten the survival of the footwear industry, resulting in business closures, inventory shortages, and price hikes, and would not help bring manufacturing back to the United States.

05/02 19:32

Apple, Samsung, and Microsoft adjust supply chain and pricing strategies in response to U.S. tariffs and global inflation pressures.

Apple, Samsung, and Microsoft are adjusting their supply chains and pricing strategies in response to U.S. tariffs and global inflation pressures. Apple is moving the production of iPhones for the U.S. market to India, shifting the production of iPads and other products to Vietnam, and sourcing chips from TSMC's U.S. facilities. Samsung is considering increasing product prices in the U.S. market due to tariff impacts. Microsoft has already raised the global prices of Xbox consoles and accessories to account for rising development costs.

05/02 18:31

The White House says tariffs will not increase car prices, while automakers such as GM and Ford have expressed concerns.

The White House emphasized that the new tariff policy from the Trump administration won't increase car prices, but car manufacturers such as General Motors, Ford, Honda, and Toyota have voiced concerns over increasing costs and are adjusting their financial forecasts and production strategies to tackle potential impacts. Even though the White House is offering compensation and exemption measures, automakers still struggle to guarantee stable future prices. Estimates suggest that tariffs could raise the cost of each vehicle by $2,000 to $12,000, impacting market confidence and consumer behavior.

05/02 15:30

American Companies Face Tariff Strain: Apple's Costs Skyrocket, McDonald's Sales Decline, The Business Community Urges Policy Changes

The United States has imposed high tariffs on China and other trading partners, resulting in cost pressures for businesses and sluggish consumer demand. Apple estimates an increase of $900 million in costs next quarter due to the tariffs, while McDonald's same-store sales have dropped 3.6% for two straight quarters. The business community is urging the creation of a tariff exemption mechanism to prevent economic harm, with more than 180 companies having submitted exemption requests. The Trump administration's exemption process is lacking in transparency, and the business sector is demanding clearer policy responses.

05/02 09:03

U.S. Tariff Policies Impact SHEIN and Temu Severely: Rising Prices, Supply Chain Restructuring, and Drop in App Rankings

Starting May 2, 2025, the United States will remove the tax exemption for small parcels valued under $800 from China and impose an import tax of up to 120% or a fixed tax of $100 per package, having a significant impact on Chinese cross-border e-commerce platforms SHEIN and Temu. The prices of goods on both platforms have risen by 40% to 100%, leading Temu to shift to a local warehouse model and nearly eliminate direct shipments from China. A reduction in advertising has caused a drop in app store rankings. This policy change is forcing consumers to switch to local platforms, altering their shopping habits.

05/02 05:02

Yiwu businesses are turning to South American and Middle Eastern markets: The US-China trade war has severely damaged the US toy supply chain

Amid the US-China trade war and tariff pressures, exporters in Yiwu in Zhejiang, China, have shifted their focus away from the US towards South American and Middle Eastern markets, which has impacted the US toy supply chain. Exports from Yiwu to the US have significantly decreased, and merchants such as Hu Tianqiang and Lin Xiupeng have adjusted their strategies. The US toy industry faces supply disruptions and rising costs as companies like Hasbro and Spin Master seek to diversify their supply chains, though challenges persist.

Apple: Supply Chain Restructuring and U.S. Chip Procurement

In Apple's first quarter 2025 earnings call, CEO Tim Cook for the first time explicitly addressed the impact of tariffs on the company's operations. He noted that if the current global tariff policies remain unchanged, Apple's costs in the second quarter of 2025 will increase by approximately $900 million. To reduce reliance on Chinese manufacturing and avoid high U.S. tariffs on Chinese imports, Apple has initiated a supply chain restructuring.

According to Cook, future iPhones sold in the U.S. will be mostly produced in India, while iPads, Macs, Apple Watches, and AirPods will primarily be manufactured in Vietnam. This shift involves not only the reconfiguration of assembly plants but also the reorganization of the component supply chain. Nevertheless, Cook emphasized that China will remain the main production site for products sold outside the U.S.

Additionally, Apple announced it will procure tens of millions of processor chips from TSMC's wafer plant in Arizona. These chips will first be used in lower-end iPads and Apple Watch products. Apple stated that in 2025, it plans to purchase over $19 billion worth of chips and components from suppliers in 12 U.S. states, demonstrating its commitment to investing in the domestic supply chain.

Samsung: Cost Pressure and Potential Price Adjustments

Samsung Electronics is facing pressure from U.S. tariffs on imports from Vietnam and China. Samsung CFO Park Soon-cheol confirmed that tariff policies have impacted product demand and component costs, particularly the rising costs of key smartphone components, which may lead to price increases in the U.S. market.

Currently, about half of Samsung's smartphones are produced in Vietnam, which is also a significant production base for Samsung TVs and home appliances. Although Samsung has a TV production line in Mexico, allowing it to avoid some U.S. tariffs, the overall supply chain is still affected. Analysts suggest that if Samsung decides to fully absorb the tariff costs, it could potentially lose up to $270 million in operating profit, accounting for one-third of its smartphone division's profits.

Microsoft: Global Xbox Price Increase

Microsoft has already adjusted the pricing of its gaming product line. Starting May 1, 2025, Microsoft will increase the prices of Xbox Series X and Series S consoles, controllers, and some accessories, with price increases ranging from 7% to 26.7%. In the U.S. market, for example, the Xbox Series S 512GB version will rise from $299.99 to $379.99, and the Series X will go from $449.99 to $549.99.

Microsoft stated in its announcement that the price adjustment is due to "market conditions and rising development costs." Although tariffs were not explicitly mentioned as the main reason, it is widely believed to be related to U.S. tariff policies on China and other countries. Besides consoles, Microsoft also announced that starting from the holiday shopping season, some first-party game prices will increase from $69.99 to $79.99, aligning with Nintendo's new game pricing.

Industry Response to Tariff and Inflation Pressure

The actions of these three tech giants reflect the dual pressures of U.S. trade policies and global inflation on the global tech industry. Apple has opted to manage costs through supply chain restructuring and local procurement, Samsung is considering adjusting product prices to maintain profits, and Microsoft has already implemented a global price adjustment strategy.

As of mid-April 2025, Apple's major products, including iPhones, iPads, and Macs, have been granted tariff exemptions by the U.S. government. However, since second-quarter sales mostly involve products imported in February, when Chinese imports were still subject to about 20% tariffs, whether further price increases will occur remains to be seen.

References

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