Apple iPhones might get more expensive if President Trump's proposals are implemented. reciprocal tariffs In approximately 90 foreign countries, which were scheduled to come into force on Wednesday, however, they have been paused for 90 days except for the levies on China.
The White House announced on Tuesday that they plan to proceed with their threat to impose additional measures which could increase expenses for various electronic devices such as iPhones, thereby affecting overall costs across the board. 104% tax on all products from China Imported into the U.S., the tax came into play at 12:01 a.m. Eastern Daylight Time on Wednesday. Shortly after, Mr. Trump increased the duty rate to 125%, taking effect right away.
The cost of the widely sought-after tech gadget begins at $599 for the entry-level version, the iPhone 16e The price is expected to rise by several hundred dollars based on Apple’s reaction to the extensive tariffs. The iPhone 16 Pro with 128GB storage, incorporating Apple Intelligence technology, currently retails for $999.
Approximately half of Apple's revenue comes from iPhones. The majority of these devices are produced in China.
In a research report released Tuesday, Wedbush Securities technology analyst Dan Ives stated that the additional tariffs could lead to a "Category 5 pricing hurricane" for personal electronic devices and various gadgets. He likened imposing taxes on China and other countries at these levels to turning an overturned boat overboard without providing liferafts.
By how much might an iPhone's price increase?
The iPhone 16 Pro Max with 256GB storage, manufactured in China, has a retail price of $1,199. According to analysts at UBS Investment Research dated April 9, under new import duties on products coming from China, this phone’s cost might increase by $675, representing a 56% hike, bringing the final price up to $1,874.
An iPhone 16 Pro with 128GB manufactured in India, priced at $999, might see its price rise to $1,119 according to an investment bank’s analysis, reflecting a hike of approximately 12%.
A report released by Rosenblatt Securities on April 3 suggested that the firm based in Cupertino, California, might increase the price of iPhones by 43% to counterbalance the impact of reciprocal tariffs.
Apple did not reply to requests seeking comments on how the Trump-era tariffs might impact iPhone costs.
What would happen if Apple shifted its manufacturing to the United States?
President Trump stated that the recently imposed U.S. tariffs are intended to encourage both American and international businesses to produce goods within the country. However, for corporations like Apple, producing items domestically involves much greater expenses related to labor. These increased costs would predominantly be transferred to customers.
According to Ives, if Apple decided to start assembling iPhones within the U.S., a product formerly priced at $1,000 when made in China would jump to around $3,500 if produced in locations like New Jersey or Texas.
He stated in a report, "Claiming that everything can simply be produced in the USA greatly downplays the intricacies of the Asian supply network and how electronics, chips, semiconductor fabrication plants, hardware, smartphones, among others, have been manufactured for American consumers over the past three decades."
Consequently, Ives strongly doubts that tariffs by themselves will prompt businesses to move their production facilities from cost-effective locations such as China to the U.S., deeming this notion "ridiculous."
However, certain businesses like Apple might try to reshuffle their supply chains to dodge the most severe tariffs. As an illustration, Apple intends to increase iPhone production in India with the aim of lessening its dependence on China, as reported by The Wall Street Journal. reported , according to individuals acquainted with the situation.