AP Technology Writer Michael Liedtke
SAN FRANCISCO (AP) – President Donald Trump’s administration is predicting a tariff barrage of tariffs that will lead China to Apple for the first time in the US to manufacture iPhones.
But that’s an unlikely scenario, even for US tariffs, which currently reaches 145% on products made in China. This is the country where Apple has made most iPhones since its first model came to the market 18 years ago.
The obstacles to shifting Apple’s production domestically include the complex supply chain that began construction in China in the 1990s. Building new plants in the US takes years, cost billions of dollars, and then they’ve been fighting Apple with economic forces that could triple the price of iPhones, threatening torpedo sales of marquee products.
“The concept of manufacturing an iPhone in the US is a non-starter,” says Dan Ives of Wedbush Securities Analyst, reflecting a widely held view in the investment community tracking every move at Apple. He estimated that the current $1,000 price tag for iPhones made in China or India would skyrocket to over $3,000 if production shifted to the US.
Apple did not respond to a request for comment Wednesday. The Cupertino, California company has not yet publicly discussed Trump’s response to tariffs on China, but this topic can arise when Apple CEO Tim Cook plans to ask questions from analysts during a quarterly meeting call to discuss the company’s financial results and strategies.
Also, given that Apple’s stock price fell nearly 20% and Trump has reduced the company’s market value by $600 billion since it began to rise on April 2, there’s no doubt that China’s tariffs will become a hot button issue.
If tariffs are held, Apple is widely expected to ultimately raise prices for iPhones and other popular products as Silicon Valley supply chains are so concentrated in China, India, and other overseas markets that have been caught up in the crossfire of the escalating trade war.
The big problem is the period when Apple is willing to retain its line at current prices before the company’s profit margin burden is too much to endure and consumers are asked to take part in the burden.
One of the main reasons Apple has room to keep the line in current iPhone pricing is that while China’s tariffs remain on the spot, the company continues to enjoy a large profit margin from revenue generated by subscriptions and other services tied to the product. The division, which raised $96 billion in revenue during Apple’s past fiscal year, remains unexplained by Trump’s tariffs.
“Apple can absorb tariff-induced increased costs, at least in the short term, without any significant economic impact,” Chatterjee said.
Apple tried to appease Trump in February by announcing plans to spend $500 billion by 2028 and employ 20,000 people in the US, but it wasn’t linked to building an iPhone domestically. Instead, Apple has pledged to fund the Houston Data Center, an artificial intelligence-powered computer server. This is a technology the company is expanding as part of the industry-wide trend.
When Trump asked if he believed Apple was planning to build an iPhone in the US this week, White House spokesperson Karoline Levitt pointed to Apple’s investment promises as evidence that the company thinks it can do that. “If Apple hadn’t thought the US could do that, they probably wouldn’t have made that big chunk of change,” Leavitt said.
U.S. Secretary of Commerce Howard Lutnick also predicted that tariffs would force a manufacturing shift during his appearance on the April 6th CBS News program. “A military of millions of humans have screwed small screws in to make iPhones, and that kind of thing will come to America,” Rutnick said.
However, when appearing at a conference in China in 2017, Cook expressed doubt about whether there are enough workers in the US labor pool who have the vocational skills necessary to do the laborious, boring and boring jobs that Rutnick was discussing.
“In the US, we don’t know if we can hold meetings of touring engineers and fill the room,” Cook said. “In China, multiple soccer fields can be filled.”
Trump also tried to put pressure on Apple to no avail in order to move iPhone production to the US during his first term as president. However, the administration ultimately exempts the iPhone from the tariffs he was imposing on China at the time. This prompted Apple to begin the process that led to some of the current iPhones and some of the other products made in India, at the time when Apple announced its commitment to invest $350 billion in US Trump’s first tariffs.
Cook also welcomed the president on a 2019 tour of the Texas factory, where Apple had been assembled parts of its Mac computer since 2013. “Today, I opened a major Apple manufacturing plant in Texas.
Original issue: April 10th, 2025, 12:59pm EDT
