BUSINESS
With the majority of Apple’s iPhones made in China, the cost of owning it might soon increase sharply.
A new round of tariffs from US President Donald Trump is shaking up the tech world, and Apple could be one of the biggest companies affected. With the majority of Apple’s iPhones made in China, the cost of owning an iPhone might soon increase sharply, according to a report from the Wall Street Journal.
The goal of these tariffs is to bring manufacturing jobs back to the US, especially in the tech sector. But experts say it could hurt everyday consumers more than it helps. Rather than moving factories to the US, it might just make smartphones more expensive for everyone.
Apple's supply chain is complex. The iPhone is made with parts from around the world, but it is mainly assembled in China. This allows Apple to keep production costs low. For example, the iPhone 16 Pro with 256GB storage sells for $1,100, but it only costs Apple around $580 to make, including assembly.
However, the new 54% tariff on Chinese-made goods could raise that production cost to $850. Without increasing the selling price, Apple’s profits would be badly hit. And Apple is not known for selling at low margins.
Building iPhones in the US is not a simple solution. Fully producing the iPhone in the US could raise the price to $3,500, according to the report.
To avoid sudden price hikes, Apple is reportedly stocking up on devices before the tariffs take full effect on April 9. This may give Apple until around Memorial Day (May 26) before any major price changes hit stores.
Some believe Apple will absorb part of the cost increase, at least for now. Prices might go up 5% to 10% instead of doubling or tripling, especially with the new iPhone 17 expected this fall.
Meanwhile, Apple is exploring ways to reduce its dependence on China. It already makes some phones in India and may expand operations in Brazil, where tariffs are lower.
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