The latest trade move from Donald Trump which includes a 145% tariff on Chinese imports threatens to increase prices for American consumers who buy iPhones together with laptops and tablets and smartwatches. Counterpoint Research reports that China manufactures 80% of iPhones sold in the United States which puts Apple under investigation. The costs resulting from these tariffs could cause iPhone prices to increase by several hundred dollars for American consumers. The depreciation of the dollar from tariff effects could raise import expenses across the globe which would increase prices in both the U.S. and the U.K. The BBC received insight from CCS Insight’s Ben Wood who stated Apple would raise worldwide iPhone prices in their next release to maintain price consistency since this would allow UK buyers to purchase low-cost devices and resell them in the U.S.
The tariff implementation could have two effects because U.S.-bound goods could enter tariff-free markets such as the UK which might lead to lower prices. The financial impact of higher prices can be minimized through the use of extended phone contracts since Wood notes that four-year contracts already exist and five-year contracts may appear in 2025. He made a humorous observation by calling it a “smartphone mortgage.” The company has expanded its manufacturing footprint away from China by establishing operations in India and Vietnam to produce U.S.-bound iPhones. During Trump’s 90-day tariff suspension on India Apple airlifted more than 600 tons of Indian-made iPhones to the United States on Thursday which indicated its plans for a transition.
The U.S. manufacturing revival push by Trump faces challenges because technology products contain components sourced from various countries which get assembled affordably in Asia. The $500 billion U.S. investment from Apple in February demonstrates its commitment but Wedbush analyst Dan Ives predicts the company will move only 10% of its Asian supply chain to the U.S. within three years at a cost of $30 billion while facing production disruptions. Will prices climb? Apple’s mum so far. Dipanjan Chatterjee from Forrester predicts Apple’s large profit margins will absorb some expenses in the near term while its dedicated customer base will tolerate price increases before switching to Android. The price of a China-made iPhone 16 Pro Max (256GB) could rise from $1,199 to $1,999 according to UBS estimates based on 125% tariffs but an Indian-made 16 Pro (128GB) would increase from $999 to $1,046. According to Ives a USA-made iPhone would cost approximately $3,500. Apple’s following action will determine the outcome.
