Last week, President Donald Trump threatened to impose a 25% tariff on Apple if it did not start manufacturing iPhones in the US. This tariff would apply to all smartphones imported into the US, meaning Apple would have to manufacture iPhones in the US to avoid it.
While Trump specifically mentioned the iPhone, he later clarified that the tariff would also affect other smartphone manufacturers like Samsung. Despite Trump’s belief that iPhones can be made in the US, analysts disagree, citing significant cost increases and supply chain challenges.
Analyst Ming-Chi Kuo suggests that it would be cheaper for Apple to pay the tariffs rather than manufacture iPhones in the US. The question remains whether Apple will absorb the costs or pass them on to consumers through higher iPhone prices.
If Apple decides to increase the price of the iPhone 17 lineup, it may not be limited to the US market. Apple faces challenges in raising prices globally without explicitly mentioning tariffs, due to potential backlash from the US President.
Investment firm Morgan Stanley predicts that Apple will raise prices globally by 4–6% to offset the tariff costs. This strategy would spread the impact of the tariffs across all markets, effectively making customers in other countries pay the US tariffs.
However, the uncertainty of Trump’s tariff threats remains. The President has a history of retracting tariff announcements, and legal challenges to his authority to impose tariffs could limit his ability to enforce them.
