Investment bank Morgan Stanley reports that major tech CEOs, including Apple’s Tim Cook, were caught off guard by the severity of Trump’s new tariffs and their attempts to negotiate exemptions will probably fail.
Apple is expected to take a $33 billion hit, while Dell and HP could lose nearly their entire projected 2025 net income. Analysts say tech leaders underestimated the tariffs’ impact and will push for changes, but success is unlikely. Unlike Trump’s first term, where Apple secured exemptions, the new tariffs are broad and inflexible, with no exceptions.
Trump insists the tariffs will force companies to move production to the U.S., but Morgan Stanley disagrees. Labor shortages, sky-high relocation costs (hundreds of billions), and lengthy setup times (at least nine months, likely years) make reshoring impractical. Even if production shifts, it’s more likely to go to Vietnam, India, or Taiwan—now also heavily tariffed.
With no cost savings from U.S. manufacturing and long-term policy uncertainty, price hikes seem inevitable for consumers.
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