Donald Trump and his tariffs have Apple backed into a corner. For months, experts have warned that the new global trade measures could impact the price of various iPhone models. Analysts predicted the smartphone could get up to 40% more expensive, pushing the price of the iPhone 16e to $850 and the iPhone 16 Pro Max to as much as $2,300.
To show he means business, the U.S. president has now threatened to impose an additional 25% tariff on iPhones. Apple hasn’t announced a clear path forward, but the company now faces a tough choice, as Trump is demanding that iPhone production be relocated to home ground.
iPhones Could Get Pricier Due to Tariffs
Posting on his social network, Truth Social, Trump made his position clear: either Apple brings iPhone production to the U.S. or faces steep tariffs. His comments put company CEO Tim Cook and his team in a tight spot, as either choice could have serious business consequences.
This isn’t the first time Trump and Cook have clashed over Apple’s supply chain. In earlier talks, Cook said iPhones destined for the U.S. market would be manufactured in India, an answer that didn’t sit well with Trump, who is now threatening with a new fee that would ultimately affect consumers.
“I have long ago informed Tim Cook of Apple that I expect their iPhone’s that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else,” Trump posted on Friday. “If that is not the case, a tariff of at least 25% must be paid by Apple to the U.S. Thank you for you attention to this mater!”
Apple had previously pledged to invest billions in the U.S. to ease tensions with Washington, but now the company may need to activate a new contingency plan. Products coming from India already had a 10% base tariff, and a new levy could further inflate iPhone prices, not without affecting other Apple products as well.
What’s Next for Apple? Experts Weigh In
Analyst Ming-Chi Kuo of TF International Securities believes Apple is better off absorbing the tariff than moving production. He argues that the costs of moving iPhone manufacturing (a task that involves building plants, hiring workers, and scaling up) would be much higher.
“In terms of profitability, it’s way better for Apple to take the hit of a 25% tariff on iPhones sold in the U.S. market than to move iPhone assembly lines back,” he noted.
Following recent events tied to the ongoing trade war, Apple had already moved some of its manufacturing to China. Experts believe that even if the company manages to relocate some operations to the United States, production capacity would be much lower than in Asia. On top of that, higher labor costs would push prices up even further. Ultimately, absorbing the tariff may be the best strategy, but it’s likely that part of that cost will fall on consumers.