iPhone will become 43% more expensive due to Trump tariffs

Apple is facing a major financial blow after the Trump administration imposed sweeping tariffs. Apple shares fell more than 9% on the news, their biggest drop since 2020.

The majority of Apple devices are manufactured in China, while Apple Silicon processors are manufactured in Taiwan. Now that tariffs on imports from these countries have been raised to 34% and 32%, respectively, the company will have to rethink its pricing policy. Analysts predict that iPhone prices could rise by up to 43%, with top-of-the-line models reaching $2,300. Even the most affordable iPhone 16e could rise in price from $600 to $858.

According to experts, Apple is unlikely to fully pass on the additional costs to customers and will bear part of the costs, which will lead to a decrease in operating profit. The price hike is expected to begin in the fall with the release of the new iPhone 17 lineup.

To reduce its dependence on overseas manufacturing, Apple is investing $500 billion in building manufacturing facilities in the United States. The company is currently building a large factory in Texas, but analysts at Wedbush Securities say it will take at least three years and about $30 billion to fully localize production. Even then, Apple will only be able to move 10% of its production to the United States. Finding enough qualified employees will be a separate problem amid tightening immigration policies.