Apple paid $800 million in tariffs to the US government in the last three months with the bulk of fees tied to China imports, even as the company shuffles its US supply chain away from the country.

The figures, revealed in a Q3 earnings call, come after the tech giant reported a “limited impact” from tariffs during Q2 of the financial year, with CEO Tim Cook blaming an increase in import volume for the change, which he predicted could also see tariff costs reach an estimated $1.1 billion for the next quarter.

He said tariffs were “currently pretty linear with volume” and reiterated plans to “optimise our supply chain and ultimately do more in the US,” investing $500 billion in the country over the next four years to increase domestic output.

Cook would not be drawn on projections beyond September, but hinted tariff costs could increase by reminding one analyst “Q1 is generally a higher volume quarter.”

The costs haven't made much of a dent in the company's profits, with net income up 9% year-on-year to $23.4bn for the quarter and revenue up 10% to $94 billion.

China still plays a big role

Apple has made a point of accelerating the movement of its supply chain for US-sold products to India and Vietnam through this year as President Trump enforces and rescinds "reciprocal" tariffs on imports from every US trade partner.

This was after it saw $700 billion knocked off its market value following Trump’s initial tariffs announcement in April, leading it to announce a $500 billion investment in February, and promise to buy 19 billion US chips.

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During the Q3 call, Cook said most iPhones, Mac, iPads and Watches sold in the US came from India and Vietnam though did not give an exact figure, and admitted “the vast majority” of Apple products sold outside the US were still built in China.

Moving its US supply chain does not appear to have helped much though, with Trump announcing a 25% tariff on imports from India this week while Vietnamese imports face a 20% fee, lower than an initial 46% tariff but higher than the 11% Vietnam had been negotiating on.

AI drives CapEx increase

Apple also revealed plans to “substantially” grow its AI investments from its current annual $4 billion CapEx as it expands data centres and reallocates “a fair number of people to focus on AI features.”

Though the iPhone maker has put a big focus on AI integrations in its recent marketing, its spending still sits way behind competitors, with Meta this week detailing its $72 billion CapEx spend for 2025.

The big three hyperscalers are also each spending $20+ billion on data centres every quarter. Apple’s lower investment could be attributed to focus on using on-device small language models to power iOS AI features.

According to its most recent environmental report, Apple operates eight data centres in North America, Europe and Asia and an undisclosed number of colocation centres leased from third parties, but has plans to grow its capacity.

Cook also hinted Apple could be open to larger M&A deals to grow its AI business, telling analysts "We're very open to M&A that accelerates our road map, we are not stuck on a certain size company."

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