Sales staffs work at an Apple shop in Hanoi, Vietnam, April 10, 2025. (AP Photo/Hau Dinh)
SAN FRANCISCO — President Donald Trump’s administration has been predicting its barrage of tariffs targeting China will push Apple into manufacturing the iPhone in the United States for the first time.
But that’s an unlikely scenario even with US tariffs now standing at 145 percent on products made in China. It is where Apple has manufactured most of its iPhones since the first model hit the market 18 years ago.
The disincentives for Apple shifting its production domestically include a complex supply chain that it began building in China during the 1990s.
It would take several years and cost billions of dollars to build new plants in the US, and then confront Apple with economic forces that could triple the price of an iPhone, threatening to torpedo sales of its marquee product.
“The concept of making iPhones in the US is a non-starter,” asserted Wedbush Securities analyst Dan Ives. This reflects a widely held view in the investment community that tracks Apple’s every move.
$1,000 price tag could triple
He estimated that the current $1,000 price tag for an iPhone made in China, or India, would soar above $3,000. That is, if production shifted to the US.
And he believes that moving production domestically likely couldn’t be done until, at the earliest, 2028.
“Price points would move so dramatically, it’s hard to comprehend.”
Apple didn’t respond to a request for comment Wednesday.
The Cupertino, California, company has yet to publicly discuss its response to Trump’s tariffs on China.
But the topic may come up on May 1. That is when Apple CEO Tim Cook is scheduled to field questions from analysts during a quarterly conference call.
And there is no doubt the China tariffs will be a hot-button issue given Apple’s stock price has dropped by 15 percent.
The company’s market value has dropped by $500 billion since Trump began increasing them on April 2.
If the tariffs hold, Apple is widely expected to eventually raise the prices on iPhones and other popular products.
That is because the Silicon Valley’s supply chain is so heavily concentrated in China, India and other overseas markets caught in the crossfire of the escalating trade war.
The big question is how long Apple might be willing to hold the line on its current prices before the tariffs’ toll on the company’s profit margins become too much to bear and consumers are asked to shoulder some of the burden.
Wiggle room
Apple has wiggle room to hold the line on its current iPhone pricing while the China tariffs remain in place. One of the main reasons is that the company continues to reap huge profit margins from the revenue generated by the subscriptions and other services tied to its product, said Forrester Research analyst Dipanjan Chatterjee.
That division, which collected $96 billion in revenue during Apple’s last fiscal year, remains untouched by Trump’s tariffs.
“Apple can absorb some of the tariff-induced cost increases without significant financial impact, at least in the short term,” Chatterjee said.
Apple tried to appease Trump in February by announcing plans to spend $500 billion and hire 20,000 people in the US through 2028. But none of it was tied to making an iPhone domestically.
Instead, Apple pledged to fund a Houston data center for computer servers powering artificial intelligence. AI is a technology the company is expanding into as part of an industrywide craze.
Source: Apple has few incentives to start making iPhones in US
