Your next iPhone may be a lot more expensive courtesy of US President Donald Trump who has threatened to hit Apple with a tariff of at least 25 per cent if iPhones sold in the US are not manufactured in the US.
And the same rule would apply to other smartphone makers, including the world’s number one manufacturer Samsung, if they intend to sell their products in the United States.
Back in April, shortly after taking office, the Trump administration exempted smartphones and computers and other electronics from 145 per cent import tax imposed on goods imported from China.
Apple CEO Tim Cook tried to sidestep potential tariffs by shifting production of its products for the US market from China to other countries including India and Vietnam.
“For the June quarter, we do expect the majority of iPhones sold in the US will have India as their country of origin and Vietnam to be the country of origin for almost all iPad, Mac, Apple Watch, and AirPods products also sold in the US,” Apple boss Tim Cook said in a company earnings call in April.
“China would continue to be the country of origin for the vast majority of total product sales outside the US.”
Apple also said it has plans to invest more than $US500 billion building factories and server farms in the over the next four years in the US and employing more than 20,000 people.
So while Apple thought it had evaded any tariffs after its international factory shuffle and promise to inject more money into the US economy and build more Infrastructure in the US, they received another broadside from President Trump with the latest threat of a further 25 per cent tariff.
“I have long ago informed Tim Cook of Apple that I expect their iPhones that will be sold in the United States of America will be manufactured and built in the United States, not India, or any place else,” wrote Trump on Truth Social.
“If that is not the case, a tariff of at least 25 per cent must be paid by Apple to the US.”
So what would this do to the price of an iPhone?
Wall Street analysts say it could send iPhone prices soaring to a staggering $US3500.
And don’t think Australian customers would be exempt from the price rise.
Apple would surely try to make up the possible added cost from the tariffs by increasing iPhone prices worldwide.
Wall Street analyst Dan Ives told Yahoo!Finance Apple moving back to the US is not feasible and could take between five and 10 years to complete.
“We believe the concept of Apple producing iPhones in the US is a fairy tale,” Ives said.
Apple is due to release the iPhone 17 in September – and many customers will have their eye on the price.
