E-Paper
Your favourite Apple iPhones could get costlier by 43% due to Trump's 'Liberation Day' tariffs | Check details
A sharp price hike could dampen consumer sentiment and give South Korea's Samsung an edge as the country faces lower tariffs than China
US President Donald Trump's sweeping reciprocal tariffs, a 10% baseline levy on all imports and a country-specific rate, could dramatically alter international trade, with consumer goods like the iPhones being among the hardest hit, news agency Reuters reported on Friday, citing analysts.
Apple sells more than 220 million iPhones annually. Its biggest markets include the United States, China, Europe, and a growing market in India.
Despite a growing production base in India, Apple still manufactures a majority of its smartphones in China, which has been hit by a massive 54% cumulative tariff rate so far.
It's Apple's choice
Analysts noted that the company can either absorb the cost or pass it on to the end consumer. Most iPhone models could see price increases up to 30-40% if Apple decides to pass on the cost of tariff hikes to buyers, the report noted.
Analysts at Rosenblatt Securities noted that, “Our quick math on Trump's tariff Liberation Day suggests this could blow up Apple, potentially costing the company up to $40 billion.”
ALSO READ | Indian official says Donald Trump's reciprocal tariff is ‘mixed bag, not a setback’: Report
The cheapest iPhone 16 model, currently priced at $799 in the US, could cost as much as $1,142, a price increase of almost 43% according to the firm's estimates.
The iPhone 16 Pro Max, currently selling at $1599 in the US, could cost nearly $2300 if cost of tariff hikes were to pass to consumers.
The cheaper iPhone 16e, the cheapest in the lineup with Apple's artificial-intelligence features, costs $599. A 43% hike could push prices to $856. Prices of other Apple devices, including MacBooks, could increase as well.
Apple managed to secure a waiver when Trump imposed tariffs on Chinese imports during his first term as US president, but did not gain a similar privilege this time. Shares of the company closed down 9.3% on Thursday, hitting their worst day since March 2020. The company did not respond to Reuters's request for a comment on the projections.
ALSO READ | Apple assembling iPhone 16e in India firms up foundation for retail expansion
“This whole China tariff thing is playing out right now completely contrary to our expectation that American icon Apple would be kid-gloved, like last time,” Barton Crockett, analyst at Rosenblatt Securities, said in a note.
Analysts also claimed that Apple intelligence rollout, with links to ChatGPT, has failed to convince enthuse new buyers or convince existing users to upgrade their devices. This has created a pressure on the company's bottom line, which could face additional pressure from Trump's tariff war, they noted.
Apple's production bases in Vietnam and India have also been hit by tariffs, 46% and 26% respectively, adding additional pressure on the company's business. According to the Economic Survey 2023-24, Apple assembled 14% of its global iPhones in India in FY24.
ALSO READ | Apple exports $6 billion of iPhones from India in big shift away from China
Neil Shah, Counterpoint Research co-founder said that Apple would need to raise its prices by at least 30% on average to offset import duties.
A sharp price hike could dampen consumer sentiment and give South Korea's Samsung an edge as the country faces a 25% tariff, lower than China, the report said.
