iPhone prices ‘risk doubling' if production moves to US

Yahoo

09-04-2025

An iPhone made in America could cost 90pc more to make than it does now if Donald Trump maintains tariffs on China, a leading Wall Street bank has warned.
With most of Apple's iPhones made in China, analysts at Bank of America have warned that shifting production to the US will be 'logistically challenging' and lead to a spike in costs.
President Trump has raised tariffs on China to 125pc from 104pc, while also pausing higher tariffs for dozens of other nations for 90 days. However, they will be hit with a baseline rate of 10pc.
The move is designed to push more manufacturing to America but doing so is likely to raise production costs, the bank warned.
'While it may be possible to move final assembly to the US, moving the entire iPhone supply chain would be a much bigger undertaking and would likely take many years, if even possible,' said a research note from the bank, which crunched the numbers using the 104pc tariff rate.
The analysts said that iPhone costs could increase 25pc 'purely on higher labour cost in the US' but could spike much more if Apple has to pay tariffs on each small part.
'If Apple had to pay reciprocal tariffs to import sub-assemblies into the US, we see the total cost of an iPhone increasing 90pc+,' the analysts warned.
The note has emerged days after Howard Lutnick, US Commerce Secretary, said in an interview that an 'army of millions and millions of human beings, screwing in little screws to make iPhones – that kind of thing is going to come to America'.
Apple has already said that it will spend $500bn (£400bn) and hire 20,000 new staff in the US, although a large chunk of those jobs are expected to be in artificial intelligence.
Trump's tariffs have prompted Apple's shares to spiral in recent days, which cost the company its spot as the world's most valuable company. The tariffs have originally impacted not only China but also Vietnam and India, where the tech giant has moved parts of its production in recent years. Mr Trump signalled on Wednesday he was pausing higher tariffs on these countries.
Although the UK should, in theory, be unaffected, some UK-based experts believe there could also be some stockpiling here from distributors and shoppers.
Harry Mills, of currency firm Oku Markets, said the increase in prices to consumers 'could be £300 or more as the tech giant updates its pricing to reflect its newly higher costs.
'The mobile phone sector moves quickly, and large wholesalers, distributors and resellers may stockpile devices ahead of anticipated price rises'.
However, Ben Wood, an analyst at CCS Insight, said it 'would be a risky move' for UK businesses to stockpile iPhones given the continued uncertainty and rapidly changing situation.
He said: 'Demand is unlikely to change dramatically in the UK at present, so the danger for any company taking this route is that they could be left with excess stock and an unwanted liability on their balance sheet.'
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