Apple may pay 25% tariff on iPhones instead of making them in the US: Report

Apple analyst Ming-Chi Kuo shared a statement on the US recent threat for imposing a 25% tariff on iPhones. Here’s what Apple might do about the situation.

After the US tariff war with China, Apple has again landed in big trouble for its iPhone manufacturing. Earlier, US President Donald Trump showcased dissatisfaction with manufacturing iPhones in India for the units sold in the US. In simpler terms, the President urged Apple to start manufacturing iPhones in the US. To showcase the urgency of the matter, Donald Trump has now threatened Apple to impose a 25% tariff on iPhones which will be sold in the country, leaving the tech giant in big financial trouble. If the tariff rule gets official confirmation, Apple may also plan to increase the iPhone prices, directly affecting end consumers over the strict decision.

Apple could bear a 25% tariff on India-made iPhone. (AFP)

By Aishwarya Panda

Aishwarya Panda is a Senior Content Producer at Hindustan Times Digital Stream with nearly 4 years of experience in tech content writing. She is passionate about writing and exploring her interests in the ever-evolving world of technology. She loves to get her hands on new tech products and gadgets, especially in the space of smartphones.

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US is likely to impose 25% tariff on iPhones

Apple is currently facing major disapproval from the US government to manufacture and export iPhones from India. Last week, the US President said, “iPhones that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else.” Now, Apple is being threatened by the government that they will have to pay a 25% tariff on iPhones which are imported to the US. This decision has raised some eyebrows, and people have quite a few opinions about the matter.

Apple analyst Ming-Chi Kuo shared a statement via an X post, which said, “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.” This may make more sense for Apple since a majority of its manufacturing is done in China, and now the company is rapidly shifting its infrastructure to India. Over the years, the tech giant has built a strong connection with suppliers such as Foxconn and Pegatron for Apple products.

Now, shifting the entire manufacturing infrastructure to the United States may come with a lot of challenges. Currently, the country does not play a very big role in iPhone assembly and shifting manufacturing to the US could cost multibillion-dollar investments. Additionally, Wedbush Securities also estimated that the manufacturing in the US could increase the per-unit cost of an ‌iPhone‌ to about $3,500. Therefore, a more financial option for Apple would be to bear the tariff imposed by the US government, as stated by Kuo.

As of now, we will have to wait and see how things further escalate between Apple and the US government in the upcoming weeks. Notably, we can expect a price bump in the US this year or even in the coming months if the US brings strict rules and actions against made in India iPhones.