The day of tariffs has finally arrived. It’s touted as Liberation Day, but the reaction from stocks around the globe doesn’t feel all that liberating. The world’s stock markets reacted quite negatively because some of the reciprocal tariffs were deemed to be the worst-case scenario and that may kick off trade wars. That is particularly true for China, and ditto for the U.S. companies that are highly dependent upon China. But what about the might Apple Inc. (NASDAQ: AAPL)?

The latest tariff news from the Trump administration is setting the incoming goods tariff at 54% on China. It is also set at 26% on India and 46% on Vietnam. This means that all of Apple’s products coming into the United States will be subject to tariffs at various rates.

Should iPhone, iPad and Mac users suddenly expect all products to rise this same amount? Not so fast. There are some initial carve-outs, one of which is semiconductors. And many companies will be (if they are not already) appealing.

Apple was down about 9% to $203.75 in early trading on Thursday in what looks to be the biggest drop since 2020. Apple is now down about 18% so far in 2025 and down almost 22% from its high. And Apple has been trading under its 200-day moving average for 17 trading days.

IS ALL NOT LOST?

BofA Securities has maintained its Buy rating on Apple, but the firm did lower its price objective down to $250 from $265 based on the tariff news. And while the target cut is something to note, analyst Wamsi Mohan expects that Apple will manage its supply chain to minimize the impact. The firm noted that if these tariff rates do stand and Apple absorbs the entire $20 billion of headwind, that may be a hit of 500 basis points to its gross margins — taking out $1.24 from earnings per share in 2026.

As for the Buy rating remaining in place, BofA views the 15% potential cut to earnings (EPS) without offsets as “attractive compared to the potential global disruption that could be caused by an escalating trade war.” The firm also sees Apple as a relatively defensive play during macro uncertainty. Mohan sees Apple employing several strategies to mitigate the tariff impact:

• raising prices on products in US and/or globally;
• pressuring supply chain even more;
• raising pricing on Services where there is very low elasticity given stickiness;
• appeal for exceptions (last go around, tariffs made Samsung more competitive in the US);
• Reoptimize supply chain (but that takes time);
• and to potentially move away from a cadence of annual product releases.

MORE REASONS TO BUY IN THE END

In the end, BofA’s Buy rating remains in place for several reasons. The first is an expected strong iPhone upgrade cycle in 2025 to 2026 (driven by the need for latest Gen AI-capable hardware. There is also still expected to be higher growth in Apple’s services revenue and also higher margins from more internally developed silicon. Apple is expected to continue with its ongoing capital returns to shareholders. AI features should also drive higher institutional ownership.

Now all that has to happen is for Apple to actually show what it is going to do and how it plans to actually mitigate or dodge the obvious hits that the tariffs pose against its earnings.