Unhappy with Apple moving iPhone production to India to skirt tariffs imposed on China, President Trump threatened Apple twice that the iPhone could be subject to tariffs, with the latest warning dropping a few days ago. Trump said that iPhones sold in the US that are not made in the US will see a 25% tariff.
Trump said that if iPhones aren’t made in the US, “a tariff of at least 25% must be paid by Apple to the US.”
Making an affordable iPhone in the US is simply not possible. Many have discussed this matter during April, when Trump’s tariff announcements shook the world, sending stocks tumbling down. Renewing threats of new tariffs won’t make it any easier for Apple to overcome many of the problems that make manufacturing iPhones in the US a problem.
Also, if Apple ends up paying that 25% tariff to the US for all iPhones coming to America from India and China, it’s very likely that Apple will pass on that extra cost to iPhone buyers.
Various insiders, including the well-known Ming-Chi Kuo, say it’s cheaper for Apple to continue making iPhones in India for the US market and deal with the tariffs later. In such a case, the more expensive iPhone would also be cheaper for the consumer looking to buy a new device than an iPhone made in America.
Whatever the case, the iPhone 17 series will be more expensive than the iPhone 16 models.
Also, it’s not just Apple that will be hit with tariffs in the near future. Trump said that Samsung and anybody else importing iPhones in the US will see similar tariffs. That means the Galaxy S26 series, due to launch in early 2026, will also bring price hikes that Samsung can’t possibly escape.
“In terms of profitability, it’s way better for Apple to take the hit of a 25% tariff on iPhones sold in the US market than to move iPhone assembly lines back to US,” Kuo said on X in response to Trump’s announcement on Friday.
Kuo explained in a separate tweet that Trump going after Apple might be a calculated political move meant to increase exposure. Whatever happens next, Trump can benefit from his attack on Apple:
If Apple moves iPhone assembly back to the US, Trump can promote it as a major “Made in America” achievement and key policy win. If Apple secures an agreement to temporarily shield itself from Trump’s targeting, Trump still secures other benefits he desires through the deal. When the need to promote “Made in America” arises in the future, he can resume targeting Apple and apply pressure with tariff threats.
Separately, The New York Times ran a story about the cost of an iPhone made in America. Well-known Apple enthusiast John Gruber took that story apart for its various claims, including estimates from analysts that an iPhone made in the US would more than double the price to $2,000 or more.
While Gruber’s criticism is warranted, and he’s right that there’s no basis for that quote, especially when it doesn’t mention which iPhone will see such a price hike, that estimate still drives home the main point here. US consumers might soon have to face a mild iPhone 17 price hike (from tariffs) or a major iPhone price hike for future models (from US production costs).
There’s absolutely no way Apple can make a cheaper iPhone in the US anytime soon or in the more distant future. Apple would have already done so, if such scenarios were possible.
When Kuo made his case that Trump going after Apple is a political move, the insider started with this question:
Apple is a consumer electronics company whose current products and services have no significant connection to national security, so why is it persistently and publicly targeted by Trump?
Apple is indeed far from being a national security threat. It’s one of America’s top companies, maybe the most important one. The iPhone is a highly coveted product around the world.
Asked why he would want to hurt an American company, Trump said that the same 25% tariff would apply to anybody selling phones in the US that are not made in America. He singled out Samsung in those comments. Samsung, by the way, is also not a national security threat.
If Trump pursues these smartphone-focused tariffs, the Galaxy S26 series might see price hikes. Like Apple, Samsung can’t move production to the US. It would be equally expensive for Samsung to make smartphones in a region that’s ill-equipped and untrained for such an endeavor.
Whatever happens with Trump’s proposed 25% tariff on iPhones and other smartphones sold in the US, I’ll remind you that Apple is already paying tariffs on different products. During its most recent earnings call, Apple said that tariffs will amount to $900 million for the June quarter.
I asked ChatGPT what the iPhone would cost if Apple decided to use its best-selling product to offset those tariffs by increasing the price of the iPhone right now. The AI said the iPhone should be up to $50 more expensive so Apple can compensate for that lost revenue. That scenario did not involve iPhone, iPad, or Mac tariffs.
Finally, I’ll also point out recent reports that predate Trump’s iPhone tariff threat. They said Apple is already looking at raising iPhone 17 costs and figuring out ways to explain the price hike without blaming tariffs. If Trump’s proposed 25% tariff happens, there’s no way for Apple to justify price hikes without blaming the tariffs.
