iPhone Prices May Surge Over 40% in the US Due to Trump’s Tariff Policy
Apple’s flagship iPhones could see a dramatic price hike of up to 43% in the United States following President Donald Trump’s new reciprocal tariff policy, which has intensified fears of a global trade war. Industry analysts warn that high-end iPhone models could retail close to $2,300 if Apple passes the full brunt of increased import duties to customers.
iPhone Manufacturing and Tariff Impact
Most iPhones are currently manufactured in China, which has now been hit with a 54% reciprocal tariff under the new policy. This significantly raises Apple’s cost of importing devices into the US. Despite Apple’s efforts to diversify manufacturing into Vietnam and India, these countries have also been subjected to 46% and 26% tariffs, respectively.
According to Rosenblatt Securities, if Apple opts to pass on the costs to consumers, the iPhone 16 Pro Max, originally priced at $1,599, could soar to nearly $2,300. The iPhone 16, currently retailing for $799, could see a hike to $1,142, while the entry-level iPhone 16e may jump from $599 to $856.
Analysts Caution Against Full Cost Transfer
Despite the potential cost increases, industry experts believe Apple may avoid immediate drastic price hikes. Angelo Zino, equity analyst at CFRA Research, noted that Apple will likely absorb a portion of the cost or delay price changes until the iPhone 17 launch this fall.
“We expect Apple to hold off on any major increases on phones until this fall when its iPhone 17 is set to launch, as it is typically how it handles planned price hikes,” Zino told Reuters.
Still, Counterpoint Research estimates Apple would need to raise iPhone prices by at least 30% on average to maintain margins under the new tariff regime.
Apple Stock Reacts; Broader Implications
Following the tariff announcement, Apple shares fell 9.3%, marking their worst single-day performance since March 2020. This underlines investor concern over rising costs and potential impact on demand.
The iPhone remains Apple’s flagship product, with over 220 million units sold annually and the US, China, and Europe as its biggest markets.
Apple’s $500 Billion US Investment Commitment
In response to the trade headwinds, Apple recently announced a $500 billion investment in the United States over the next four years. CEO Tim Cook emphasized the company’s commitment to American innovation, stating, “We’re proud to build on our long-standing US investments with this $500 billion commitment to our country’s future.”
This investment may signal a longer-term strategy to localize production and reduce reliance on foreign manufacturing, but in the short term, consumers could face significant price hikes for Apple products if tariff costs are not absorbed by the company.
