Tariffs Test Big Tech: Apple, Amazon, and Meta Brace for Costly Disruption

Big Tech execs had front row seats at President Donald Trump’s inauguration in January. About 100 days later, and this week's latest earnings calls show what impacts tariffs have had and how the companies are bracing for a financial storm. This week, numbers from the Commerce Department revealed the nation's economy shrank during the first quarter of 2025—the first decline since the opening three-month period of 2022. U.S. gross domestic product—the value of all goods and services produced across the country—fell at a seasonally adjusted 0.3% annual rate, as companies increased imports and prepared to navigate the Trump administration’s tariffs. For Big Tech firms, that impact is manifesting in a range of ways. Apple is eyeing a $900 million cost hit by mid-2025, while Microsoft leans on AI to buffer economic pressure. As uncertainty clouds global trade, Google, Meta, and Amazon also face shifting costs and supply chain headaches. Here’s what the Silicon Valley titans had to say during their earnings calls this week. De minimis exemption may sting Google's ads business Google flagged that changes to the de minimis exemption could pose a “slight headwind to our ads business in 2025, primarily from APAC-based retailers,” svp and chief business officer Philipp Schindler said during the earnings call with investors. When asked by an investor whether any specific ad verticals or regions were showing signs of weakness quarter-to-date, Schindler said the company is “obviously not immune to the macro environment,” but declined to speculate further. He did not directly address tariffs. Meta sees Asia ad pullback tied to de minimis exemption Meta pointed to reduced ad spend from Asia-based ecommerce exporters ahead of the May 2 expiration of the de minimis exemption. Chief financial officer Susan Li said some of that spend has shifted to other markets, but overall levels remain below what the company saw prior to April. She added that there’s still uncertainty about how the change will affect Q2 performance. Amazon says it can emerge stronger from tariff impact Amazon hasn’t seen a drop in consumer demand tied to tariffs—yet. CEO Andy Jassy said the company is observing “heightened buying” in some categories, likely due to consumers shopping ahead of potential price hikes. While average selling prices haven’t meaningfully increased, Jassy attributed that to forward buying by Amazon and its sellers, as well as delayed pricing changes. He cautioned that this could shift depending on where tariffs land. “Amazon is not uniquely susceptible to tariffs,” Jassy said. “As it relates to China, retailers who aren’t buying directly from China are typically buying from companies who themselves are buying from China, marking these items up, rebranding, and selling to U.S. consumers. These retailers are buying the product at a higher price than Chinese sellers selling directly to U.S. consumers in our marketplace, so the total tariff will be higher for these retailers than for China direct sellers.” The word "tariff" was mentioned 18 times in the call. Amazon’s Q2 outlook is “inherently unpredictable and may be materially affected” by fluctuations in foreign exchange rates, tariff and trade policies, inflation, interest rates, and broader global economic conditions, according to vp of investor relations Dave Fildes. Still, Jassy said he’s optimistic the retail giant could come out of the current tariff environment stronger, as it did with past disruptions like the Covid-19 pandemic. Microsoft sees software as buffer Tariffs came up only once in Microsoft’s prepared remarks during the earnings call. CFO Amy Hood noted that Windows OEM and devices revenue grew 3% year over year, exceeding expectations. She attributed part of the bump to elevated inventory levels, as tariff uncertainty led to stockpiling throughout the quarter. While Microsoft’s direct exposure to tariffs is limited compared to companies that either sell physical goods or provide platforms for companies selling those goods, it still faces risks. Rising equipment costs and potential cuts to clients’ software budgets could have an impact. CEO Satya Nadella pointed to the company’s expanding AI infrastructure—particularly investments in Nvidia GPUs—as an area where tariff-driven costs could emerge. Still, he positioned software as a deflationary force. “If you buy into the argument that software is the most malleable resource we have to fight any type of inflationary pressure or growth pressure where you need to do more with less, I think we can be super helpful in that,” Nadella said. Tariffs will add $900 million in costs for Apple Apple CEO Tim Cook said that if current tariff conditions persist, the company could face an additional $900 million in costs for the June 2025 quarter. In that quarter, Cook said the majority of iPhones sold in the U.S. will come from India, while iPads and Macs imported to the U.S. will be manufactured in Vietnam. Cook confirmed that China would remain the primary source for the “vast majority” of Apple products.

Platforms

Tariffs Test Big Tech: Apple, Amazon, and Meta Brace for Costly Disruption

In Q1 earnings calls, CEOs reveal how they’re adjusting strategies and managing cost hikes through 2025

Trishla Ostwal

Paul Hiebert

About

Subscriptions

Events

Publications