Apple Faces Its Toughest Year in Over a Decade

The year 2025 is shaping up to be Apple’s most turbulent since the iPhone era began. The tech giant’s stock has dropped 19% year-to-date, it faces a sweeping antitrust lawsuit from the U.S. Department of Justice, and it continues a protracted legal battle with Epic Games over its App Store policies. At the same time, Apple has fallen behind key competitors in artificial intelligence, and is now threatened by aggressive tariff rhetoric from President Trump. For CEO Tim Cook, this confluence of crises marks the biggest leadership test of his career.

Trump’s iPhone Tariff Threat and the Supply Chain Dilemma

The most urgent new challenge for Apple comes from Washington. Last week, President Trump posted on Truth Social, threatening a 25% tariff on all iPhones sold in the U.S. unless Apple relocates production to America. The threat was later extended to Samsung, signaling pressure on the entire consumer electronics sector.

Cook has already spent years diversifying Apple’s supply chain to shield the company from trade wars. Today, most iPhones for the U.S. market are made in India, while iPads, Macs, Apple Watches, and AirPods come from Vietnam. Yet, even with this global network, Apple expects a $900 million hit to quarterly profits due to existing tariffs.

The real risk: building iPhones in the U.S. would push costs up by an estimated 35%, raising the retail price of a top-end iPhone from $999 to about $1,350, due to higher U.S. labor costs and tariffs on Chinese components. Alternatively, simply absorbing the 25% tariff would force Apple to hike global iPhone prices by about 4%–6%, potentially eroding its competitiveness versus Android rivals.