The new tariffs announced by US President Donald Trump could potentially lead to higher iPhone prices due to their impact on Apple’s manufacturing and costs.
Impact of New Tariffs on Apple
Apple’s manufacturing operations are heavily reliant on China, with over 90% of its products, including the iPhone, being produced there.
The tariffs will impose an additional 34% duty on products imported from China, which is on top of the existing 20% tariff.
This will significantly increase Apple’s costs for sourcing iPhones and other components from China.
How This Could Affect iPhone Prices
If Apple does not receive an exemption from the new tariffs and opts to absorb the additional costs, it could experience a 9% reduction in gross margins, according to estimates from Citi.
While Apple might absorb some of these costs, it is likely that the company could pass on a portion of the increased cost to customers.
This could result in higher iPhone prices, as the company may need to raise prices to maintain profitability.
Additionally, products sourced from India will face a 26% tariff, which could also have a slight impact on the production of iPhones in India.
Although the impact on Indian production is relatively smaller, it could still contribute to a 0.5% decline in Apple’s gross margins.
Other Global Tariffs
In addition to China and India, the US is imposing tariffs on several other countries, including:
Cambodia (49%)
Thailand (36%)
Japan (24%)
South Korea (25%)
Switzerland (31%)
Vietnam (46%)
Israel (17%)
Britain (10%)
The European Union (20%) also faces the new duties.
With such widespread tariffs affecting Apple’s global supply chain, the company faces increased manufacturing costs, which might lead to higher prices for iPhones and other Apple products globally.
Apple’s Response and Stock Impact
Apple’s stock price has already been affected by these tariff announcements.
The company’s stock fell by 5.6% following the news, and it has experienced an 11% decline in its stock value this year.
Apple has been trying to reduce its dependency on China for production by diversifying its supply chain, but the transition takes time, and a large portion of its production still takes place in China.
