US tariffs could hit Samsung phones, exempt China-made iPhones

Korea Herald

4 days ago

Proposed tariffs could raise Galaxy prices while Apple benefits from planned US investments
Samsung Electronics could face higher US tariffs on its smartphones and other finished electronics as early as this week, even as Apple's iPhones made primarily in China may be granted exemptions, industry sources said Tuesday.
This would highlight a notable divergence in how major smartphone makers are treated under Washington's trade measures aimed at protecting US manufacturing and reducing reliance on Chinese supply chains.
Industry officials said the US President Donald Trump's administration is considering tariffs of up to 25 percent on smartphones, laptops, monitors and other semiconductor-related finished goods. If applied at that rate, the base model of Samsung's Galaxy S25, currently priced at $799.99, could rise by nearly $200, while next year's Galaxy S26 series could see a 30-40 percent increase.
Such a move could weaken Samsung's recent gains in the US market. The Korean tech giant held a 31 percent share in the second quarter, narrowing the gap with Apple to 18 percentage points from 33 percentage points a year earlier, according to Canalys.
Apple, however, appears better positioned to secure tariff exemptions despite manufacturing about 90 percent of its iPhones in China, with the remaining 10 percent shared equally between Vietnam and India.
The company recently pledged to invest $600 billion in new US production facilities over the next four years, creating 20,000 jobs and strengthening domestic supply chains — a plan developed in coordination with Washington. President Trump has signaled support for Apple's expansion, raising expectations that the company could be spared from the proposed tariffs.
'Apple's preemptive investment announcement appears to have been made with potential smartphone tariffs in mind,' said Kim Rok-ho, an analyst at Hana Securities.
'Even if semiconductors are exempted from tariffs, if devices like smartphones and PCs are included, Korean products will inevitably be at a disadvantage against Apple in the US market.'
Samsung manufactures about 50-60 percent of its smartphones in Vietnam, with the rest produced in India, Korea and South America. It stopped handset production in China in 2019 after losing market share there.
'(The US Department of Commerce) investigation is wide ranging from semiconductors to finished goods such as smartphones, tablets, PCs and monitors,' Samsung CFO Park Soon-cheol said in July. 'We expect the impact on our business to be significant.'
A Samsung official said the company is 'closely monitoring' developments, noting that while price increases after product launches are unprecedented, they may be considered in 'special cases like tariffs.'
According to an industry source familiar with Samsung's operations, "The firm is exploring options such as large-scale US investments or relocating some production to America," but "high labor costs and operational challenges remain a major concern," he added.