Former President Donald Trump has once again floated the idea of Apple manufacturing iPhones in the US, as he threatens the company with a 25% tariff if it doesn’t start making its smartphones in America for American buyers.
“I’ve been telling Tim Cook of Apple for a long time that their big move to China, where they build a huge plant, was a mistake. It would be far better to make iPhones for the US in the USA, not China or anywhere else. If they don’t, I predicted they would need to pay a big tariff of at least 25% to the US,” Trump shared in a post on Truth Social.
Trump appears to be reacting to changes Apple has made to its supply chain after the former President’s sweeping tariffs announcement in April.
With the iPhone 16 starting at $799 and the iPhone 16 Pro from $999, just how much would an American-made iPhone cost?
Taking into account Trump’s talk of a 25% tariff on iPhones, Wall Street analysts predict production costs could soar to as much as $3,500.
This leaves Tim Cook with some tough decisions to navigate.
The iPhone’s price could skyrocket with a 25% tariff.
Apple’s new iPhone lineup is expected to be unveiled in September, and shoppers and Wall Street will be watching to see if the company decides to pass on the potential cost increase to consumers.
At the time, Apple was facing potential tariffs of 54% from China and 46% from Vietnam – two manufacturing hubs that analysts estimate produce the majority of Apple’s iPhones.
Such massive tariffs threatened to add significant costs for Apple. In an April note, Rosenblatt analyst Barton Crockett estimated that Apple could face $40 billion in tariff costs.
At the time, Crockett and Wedbush Securities analyst Dan Ives predicted that tech hardware prices would need to rise by around 40% to offset the tariffs. Apple was under pressure to find supply chain solutions or consider raising iPhone prices.
Apple responded by flexing its supply chain, further ramping up production in India, which manufactures a small but growing portion of total iPhone production.
During Apple’s quarterly business plan discussion with analysts on May 1st, CEO Tim Cook provided insights into the company’s plans to cope with the uncertain tariff environment – Apple would try to sell as many Indian-made iPhones to Americans as possible.
“We expect the vast majority of iPhones sold in the US to be of Indian origin. Meanwhile, Vietnam will be the country of origin for most iPad, Mac, Apple Watch, and AirPods production. China will continue to be the country of origin for the vast majority of total product sales outside the US.” Tim Cook stated.
In his April note, analyst Barton Crockett wrote that moving iPhone production to the US was infeasible in the near term.
Apple sells a large number of iPhones to Americans every quarter, and building new factories takes time, as well as ensuring production quality meets Apple’s standards.
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