'It's way better for Apple to...': Analyst on why company should pay 25% tariff on iPhones sold in the US
APPLE TARIFFS by Donald Trump
Following US President Donald Trump's recent declaration that iPhones manufactured outside the US and sold within the country would face a 25% tariff, prominent analyst Ming-Chi Kuo has offered his assessment of the potential implications for Apple. Kuo suggests that from a profitability standpoint, absorbing the 25% tariff on US-bound iPhones would be more financially viable for Apple than relocating its iPhone assembly lines back to the country.
'In terms of profitability, it's way better for Apple to take the hit of a
25% tariff on iPhones
sold in the US market than to move iPhone assembly lines back to US,' Kuo said.
— mingchikuo (@mingchikuo)
According to Kuo, the precise tariff percentage proposed by Trump is not the primary concern. Instead, the more significant issue is that this marks Trump's second recent direct comment targeting Apple, which Kuo views as a clear warning sign the company cannot disregard.
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Here are a few additional points:
1. The specific tariff percentage Trump proposes on iPhones isn't the main concern. The bigger issue is that this is Trump's second recent pointed comment targeting Apple—a warning sign Apple can't ignore.
2. Apple's top priority in negotiations with Trump should be finding ways to avoid, delay, or prevent higher iPhone tariffs. For example, Apple could adjust its DEI policies to secure Trump's temporary commitment to hold off on targeting them.
The analyst further contends that moving all iPhone assembly for US models back to the US before the end of Trump's potential term is an unrealistic prospect.
'Moving all iPhone assembly for US models back to the US before Trump's term ends is unrealistic, and Trump also opposes Apple producing iPhone US models in India. So, even if Apple secures a temporary deal with Trump to avoid iPhone tariffs this time, there's no guarantee they won't face repeated tariff threats during his term,' he added.
What Trump said about Apple manufacturing in India
Trump said in a post on his social media platform that if Apple does not make iPhones in India, it has to pay a 25% tariff.
'I have long ago informed
Tim Cook
of Apple that I expect their iPhone's that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else. If that is not the case, a Tariff of at least 25% must be paid by Apple to the US,' Trump posted on his social media platform.
During a business event in Qatar, Trump warned Apple CEO Tim Cook, saying 'I had a little problem with Tim Cook yesterday. I said to him... I don't want you building in India," Trump revealed.
The President claimed Cook agreed that Apple would be "upping their production in the United States."
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