The nearly universal 10% tariffs enacted by Trump have been declared illegal, pending appeal, so Apple may get even more cost reduction across its supply chain and additional refunds.
The so-called "Liberation Day" on April 2, 2025 hit Apple's supply chain like a ton of bricks. A year later, those "reciprocal" tariffs were declared illegal and new global tariffs were put in place immediately.
President Trump attempted to utilize a never-before-used provision to enact the 10% tariffs without congressional approval, but that has backfired. On Thursday, the Court of International Trade has found those new global tariffs were also illegal.
Section 122 of the Trade Act of 1974 allowed a sitting President to enact an up to 15% tariff for 150 days. It was meant to be used in response to "balance of payment" issues, according to the New York Times.
Lawsuits ensued and the courts didn't take long to arrive at the conclusion that these broad tariffs were also illegal. This is yet another blow to the administration after the previous tariffs were struck down in February by the Supreme Court.
Trump has long claimed the illegal tariffs were put in place to balance "unfair" deficits created by other countries trade. Instead, the billions collected have to be returned to the companies that paid them.
The end result was a year of pain for American wallets.
How tariffs affect Apple
Apple is a global company with a giant supply chain that ships products from everywhere. Any universal tariff automatically cuts into Apple's margins or requires prices to change somewhere.
Luckily, so far, Apple CEO Tim Cook's actions have buttered Trump up and gained them some exceptions. Apple never raised prices to combat tariffs and will now use the refunded cash to invest into the Untied States.
It isn't clear what's next for the Trump administration beyond an appeal. If the ruling holds, it could mean some sanity returning to global trade.
The tariff rates could finally return to an average of around 2.7% for Apple that was in place for the Biden administration. Consumer goods could also see some prices drop thanks to the end of the trade war.
There's no predicting exactly how this ruling will affect Apple. It should mean recovered revenue and wider product margins.
For Trump, it's bad news as he heads to China to discuss trade with Xi Jinping. The loss of the illegal tariffs as leverage could hurt negotiations, but Cook will be there with other executives as a power play.
