How the Supreme Court’s tariff decision affects Apple

Apple’s tariff bill has increased by nearly $1 billion each quarter, but that figure is expected to begin to decline following the Supreme Court’s decision on tariffs.

The Supreme Court on Friday struck down much of President Donald Trump’s sweeping tariff agenda, delivering a major critique of the president’s basic economic policy.

Apple has paid about $3.3 billion since Trump imposed tariffs last year.

Shares of the iPhone maker rose nearly 1% on Friday.

Friday’s decision means Apple could start to see lower production costs and be more able to protect its margins. The company may also face less pressure to shift its production away from China and simplify its supply chain.

Apple declined to comment.

Major tariff costs arise from import duties the United States imposes on products and components manufactured abroad (particularly from China and other Asian partners such as Vietnam and India).

Announcing its plan to impose tariffs in May, CEO Tim Cook said Apple sources half of its U.S.-destined iPhones from India and most of its other U.S. products, such as Macs, AirPods and watches, from Vietnam, where tariffs were lower than China’s at the time.

Friday’s decision eliminates Trump’s 47% tariffs on Chinese-made goods as of December. This also gives Apple the opportunity to produce more US-affiliated products in China, where most of its products are sourced from countries other than the US, rather than turning to India and Vietnam.

Cook emphasized on earnings calls that Apple largely covers tariff costs to avoid sudden price increases for customers.

Friday’s ruling means the U.S. government could owe more than $175 billion in refunds to importers after the Supreme Court ruled in a 6-3 decision that tariffs unilaterally imposed by Trump were illegal.

One of the big questions is whether Apple will fight to roll back its tariffs or eat up the costs to avoid angering the president.

Addressing the SCOTUS decision at a press conference Friday afternoon, Trump did not commit to refunding U.S. companies that paid the tariffs and said he expected a multi-year “litigation” over getting the money back.

The tariffs tested the relationship between the commander-in-chief and chief executive of one of the world’s most valuable companies.

The once solid relationship between Trump and Cook began to sour over the idea of ​​a US-made iPhone. In May, Trump said he had “a little problem with Tim Cook” and threatened to impose a 25% tariff on iPhones.

Cook went on a charm offensive.

In August, he appeared at the White House with Trump to announce plans to spend nearly $600 billion in the United States over four years. Apple has also committed to purchasing parts and expanding its relationships with U.S. suppliers.

Cook presented Trump with a custom, engraved glass plaque with a 24-carat gold base.

Last month, Cook attended a White House screening of the “Melania” documentary about First Lady Melania Trump.

Despite Friday’s decision, tariffs are still a moving target, leaving many questions about the impact on companies like Apple.

Hours after the Supreme Court struck down the reciprocal tariffs, the president said he would sign an executive order imposing a new “global tariff” of 10%, which he put forward under Section 122 of the 1974 Trade Act.

Tariffs using this statute can only last 150 days, and any extensions require congressional approval.

The administration also used Section 301 to launch several investigations into potentially unfair trade practices, which could result in additional new tariffs, the president said.

CNBC’s Steve Kovach contributed to this report.