The iPhone isn’t cheap. Not even close. Apple’s phones have been setting the bar for high-end smartphone pricing for years, though. Apple has also been improving the iPhone without changing the price, which is a good thing. The simplest example concerns memory. In 2014, Apple upgraded its storage tiers without changing the iPhone 6’s price. It did the same this year with the iPhone 7, though the iPhone 7 Plus did get a bit more expensive because of the new dual camera and the added RAM.
Are you upset about the iPhone 7 Plus price hike despite the added benefits? If so, we have some bad news: Donald Trump may make the iPhone more expensive than ever if he moves forward with his trade plans for China.
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China already threatened Trump’s America with an editorial in a state-run newspaper. The piece basically said that Trump’s comments related to US-China trade did not go unnoticed. And that China will respond to any of Trump’s future moves against China with actions that will hurt American businesses, including Apple’s iPhone.
Trump said during his campaign that he would impose a 45% tariff on China imports. Business Insider reports that Barclays researchers expressed in a note that a Trump administration would likely settle on a 15% tariff on imports from China. That would mean the government would take 15% of the imported goods’ value in taxes.
Such a tariff would force Apple to raise prices for the iPhone as well, making it a more expensive purchase for the American buyer.
“In general, if tariffs go up by 15%, we tend to find that prices go up, but not usually entirely by 15%,” Columbia economics professor Amit Khandelwal said. “But it’s reasonable to expect that prices would go up a sufficient amount.”
“Tariffs are imposed on wholesale price, so if I’ve got my $1,000 computer in front of me, it came in to the airport wholesaler valued at probably $500 or less,” Stern economics professor Paul Wachtel said.
Business Insider says the iPhone’s price could go up as much as $97 per phone, but $50 would be a more reasonable hike. Apple could always choose to pay the fee out of its own pocket, but that’s unlikely. The same tariff would apply to other electronics including smartphones from other brands, not just the iPhone.
“Whether an iPhone is going to go up in price $10 or something is a small issue,” Wachtel said. “If President Trump starts putting tariffs on electronic goods, does that begin to wreak havoc on the global electronics industry? Now you’re talking a real issue.”
That said, the iPhone 8 will be the first Apple smartphone released under Trump, so it’ll be interesting to see whether Trump’s approach towards trade with China will have am impact on next year’s iPhone pricing.
