Apple Inc. shares dropped significantly on Friday. They fell by 5%. This happened after two key announcements. Apple revealed a reduced stock buyback program. The company also warned about costs from US-China tariffs.

Quarterly earnings from two of the world’s most valuable companies show how President Donald Trump’s trade wars threaten their bottom line.

Apple is slated to report fiscal second-quarter results after the market closes Thursday, with investors likely to be watching for clues on how shifting trade policies could impact the iPhone maker.

During the call, Cook offered analysts and investors his first thoughts on the potential impact of the tariffs on the company’s earnings. He said there was “limited impact” in the second quarter, partly due to Apple planning ahead and optimizing its supply chains.

Apple CEO Tim Cook publicly addressed the impact of tariffs on the iPhone maker’s business for the first time on an earnings call Thursday, saying they could add $900 million to the company’s overall costs.

And Apple CEO Tim Cook had quite a carefully crafted statement. (Check out CNET's regularly updated tariff pricing tracker.) And the word of the day for this earnings call was "color." "Now let me walk you through the impacts of tariffs in the March quarter and give you some color on what we expect for the June quarter,