Apple expects to pay $1.1 billion in tariffs for the July–September quarter, a significant increase from the $800 million incurred last quarter, CEO Tim Cook revealed during the company’s Q3 earnings call on Thursday.

The projected figure is based on current trade policies and rates, though Cook noted that actual costs could end up lower — as happened in the previous quarter, when Apple’s estimated $900 million bill fell short by \$100 million.

Most of Apple’s tariff burden stems from the International Emergency Economic Powers Act. Under a U.S.-China trade agreement earlier this year, tariffs on Chinese imports were set at 30%. That deal, which reduced reciprocal tariffs from 125% to 10% and includes a separate 20% fentanyl-related duty, remains in effect until August 12.

Despite the trade tensions, Apple’s iPhone sales surged, with revenue jumping 13% year-over-year to $44.5 billion — nearly half of the company’s total $94 billion quarterly revenue. Cook credited the performance to strong demand, rather than fears over tariff-related price hikes. “We did set an upgrade record,” he said, “because of the strength of the product.”

Apple continues to shift manufacturing away from China to countries like India and Vietnam in response to tariff pressures. Nearly half of U.S.-bound iPhones are now made in India, while Macs, iPads, and Apple Watches are assembled in Vietnam. However, both countries still face tariffs of 25% and 20%, respectively.

Cook also reaffirmed Apple’s domestic commitment, announcing a $500 billion investment in U.S. operations over the next four years, including chip and semiconductor development.

With trade uncertainty lingering, Apple’s long-term strategy hinges on both global diversification and deeper investment at home.