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Apple CEO Tim Cook has denied that the latest round of iPhone price hikes is linked to President Donald Trump’s sweeping tariff plans, even as new disclosures suggest the company is absorbing billions in added costs from the ongoing U.S.-China trade war.

“There’s no increase for tariffs in the prices to be totally clear,” Cook told CNBC’s Jim Cramer from Apple’s Fifth Avenue store in New York City on Friday, as the iPhone 17 lineup launched worldwide.

It was one of the first times Cook had directly addressed tariffs in relation to iPhone pricing.

Behind Cook’s assurances, the numbers tell a different story. In August, Cook revealed that tariffs could add as much as $1.1 billion to Apple’s expenses in the September quarter alone. He disclosed during an earnings call that Apple had already swallowed about $800 million in tariff costs in the June quarter — slightly less than the $900 million the company had estimated in May.

Most of the charges, Cook explained, stemmed from levies imposed under the International Emergency Economic Powers Act (IEEPA), which largely targeted goods sourced from China. Apple has been actively diversifying its supply chain toward countries like India and Vietnam to blunt the fallout, but Cook acknowledged “many factors that could change, including tariff rates,” underscoring the uncertainty around U.S.-China trade policy.

The Wall Street Journal reported in May that Apple had even considered raising prices on its upcoming iPhone lineup as tariffs escalated, a possibility that now appears to have materialized with the iPhone 17 Pro’s $100 price jump.

Earlier this month, Apple raised the price of its iPhone 17 Pro by $100 while keeping entry-level models flat, and replaced the Plus with a pricier Air model. Analysts widely expected price hikes given the growing cost burden, even before Cook’s latest remarks.

While Cook insists tariffs are not the driver, Apple’s actions suggest the company is protecting its margins by pushing premium consumers to absorb more of the strain while preserving entry-level affordability. This is believed to be a result of pressure from the White House, as Trump has warned business leaders not to amplify the impacts of the tariffs.

Supply Chain and Political Calculations

Apple’s pivot to new supply chain routes has been strategic. Historically reliant on China for production, it is increasingly importing from India and Vietnam to lower tariff exposure. At the same time, Cook has made high-profile public appearances with Trump, as Apple pledges at least $600 billion to bolster U.S. manufacturing and suppliers.

Still, the financial hit is substantial. Apple’s June quarter saw an $800 million tariff charge, and with another $1.1 billion projected, the cumulative toll is mounting fast. Analysts projected the scale of potential price hikes. Rosenblatt Securities estimated last month that the base iPhone 16, currently priced at $799, could rise to $1,142 due to tariffs, a 43% increase. Similarly, UBS analysts predicted that the iPhone 16 Pro Max, starting at $1,199, could see a $350 increase, bringing its price to around $1,549, a nearly 30% rise, according to CNBC.

Analysts say the tariff question cannot be dismissed outright, noting that the financial burden is clearly influencing Apple’s overall pricing and product strategy, even if Cook insists tariffs aren’t the direct reason for price hikes.

Companies are believed to be insulating the mass market while leaning on high-end buyers to shoulder the costs.

Chinese tech giant Huawei has unveiled a safety-focused version of the artificial intelligence model DeepSeek, positioning the release as a major step in ensuring compliance with Beijing’s strict guidelines on how AI is deployed domestically.

The company claims the new model is “nearly 100% successful” in blocking politically sensitive discussions, reflecting how Chinese AI companies are increasingly required to integrate political safeguards directly into their systems.

Huawei announced the new model, DeepSeek-R1-Safe, on its official WeChat account late on Thursday. It said the system was trained using 1,000 of its in-house Ascend AI chips and co-developed with Zhejiang University, the alma mater of DeepSeek’s founder, Liang Wenfeng. Despite that link, Huawei stressed that neither DeepSeek itself nor Liang was directly involved in the project.

Building AI Within Beijing’s Red Lines

The model’s debut comes against the backdrop of China’s sweeping rules that require all AI models released for public use to conform to “socialist values” and avoid politically sensitive topics. Regulators have made clear that companies cannot launch consumer-facing AI products unless they pass rigorous reviews ensuring that chatbots and other AI tools do not produce responses that contradict Party messaging or touch on restricted subjects.

Huawei said DeepSeek-R1-Safe achieved “nearly 100% success” in filtering out harmful and politically sensitive content, including toxic speech, incitement to illegal activity, and politically restricted issues. However, in role-playing tests, disguised prompts, or encrypted coding scenarios, the success rate fell to 40%, highlighting the difficulty of ensuring airtight compliance.

Still, Huawei described the model as an advancement, reporting that it achieved an 83% comprehensive security defense capability in testing, outperforming rivals like Alibaba’s Qwen-235B and DeepSeek-R1-671B by 8% to 15% under identical conditions. Importantly, it suffered less than a 1% performance degradation compared to the original DeepSeek-R1, suggesting that stricter safety filters did not come at a significant cost to efficiency.

DeepSeek’s Role in China’s AI Strategy

The move also illustrates how the original DeepSeek models have become a backbone for China’s AI ecosystem. The company’s R1 and V3 releases earlier this year shook Silicon Valley and global investors, triggering a selloff of Western AI stocks due to their sophistication and efficiency. Since then, Chinese companies and universities have rushed to adopt, adapt, and localize DeepSeek’s architecture for a wide range of applications.

Huawei’s effort shows how those adaptations are increasingly being tied to political imperatives. Domestic AI chatbots already reflect Beijing’s priorities: Baidu’s Ernie Bot, China’s first large-scale answer to OpenAI’s ChatGPT, refuses to engage on politically sensitive subjects and redirects users toward neutral or Party-safe answers. Huawei’s new system takes this a step further, explicitly framing its compliance record as a feature in itself.

The announcement comes during Huawei Connect in Shanghai, the company’s flagship annual conference. Huawei also broke years of secrecy by unveiling roadmaps for chip and computing product development, underlining its ambitions to reduce reliance on foreign technology and stake a claim as a leader in both hardware and AI safety.

This dual emphasis — cutting-edge performance with ironclad compliance — has become a hallmark of how China’s AI champions are distinguishing themselves from Western rivals.

However, Huawei’s release underscores the dual challenge facing Chinese AI firms. On one side, they are under pressure to match the pace of Western leaders like OpenAI, Anthropic, and Google DeepMind in terms of innovation. On the other hand, they must operate within political guardrails that demand their systems actively defend against politically sensitive content.

This underlines how Beijing’s approach to the AI arms race encourages innovation, but only within strict ideological boundaries. Its guardrails on the overuse of DeepSeek, China’s most innovative AI model, are a clear sign that compliance and control are not secondary considerations but central pillars of how domestic AI will evolve.