What Trump’s Vietnam Trade Deal Could Mean for Apple

President Donald Trump holds an Apple iPhone during an executive-order signing in the Oval Office of the White House. (Samuel Corum/Sipa/Bloomberg)

U.S. tariffs on Vietnam, imposed under the trade deal President Donald Trump unveiled on Wednesday, are expected to do relatively little damage to Apple’s margins, even though the company is shifting production of many devices there.

The deal includes a tariff of 20% on imports from the Southeast Asian country, compared with the 46% the president said April 2 that he would impose. It will have only a small negative impact on Apple’s margins, says one UBS analyst, even though Apple won’t be exempt from the levies, as it was during Trump’s first term.

Apple will feel the pain on products like MacBooks, iPads, and AirPods, which it produces in Vietnam. However, UBS’s David Vogt wrote in a research note that even though Vietnam has been a key region for Apple’s supply-chain investment, its dependence on Vietnam is small relative to its reliance on China because Apple doesn’t produce the iPhone there.

“Given the relatively small physical footprint and focus on ancillary products, a 20% tariff on imports into the U.S. will have a negligible impact on Apple margins in our view,” Vogt wrote. Apple didn’t immediately respond to a request for comment.

Apple’s total 2024 revenue was $391 billion. iPhones brought in $201.2 billion of that revenue. Revenue for iPads, Macs, and Wearables totaled $26.7 billion, $30 billion, and $37 billion, respectively.

“Given the lack of iPhone exposure in Vietnam and the relatively modest supply chain footprint, the revenue exposure to Vietnam imports into the U.S. is a low-single percentage of total revenue,” Vogt said.

Apple has been caught in the crossfire of Trump’s trade war with the rest of the world. The president wants the tech company to begin making iPhones in the U.S. as he seeks to bring manufacturing back to the states. Raising tariffs on China, the country where Apple makes most of its iPhones, is part of that effort.

Moving manufacturing to the U.S. would be an expensive, long-term endeavor. Rather than take that on, Apple has gone ahead with plans to assemble its products outside of China, but not in the U.S.

“For the June quarter, we do expect the majority of iPhones sold in the U.S. will have India as their country of origin and Vietnam to be the country of origin for almost all iPad, Mac, Apple Watch, and AirPods products sold in the—also sold in the U.S.,” CEO Tim Cook said on the company’s earnings call in May.

Apple stock was up 1.8% to $211.56 on Wednesday.

Write to Angela Palumbo at angela.palumbo@dowjones.com