The tariffs, aimed at bringing high-tech manufacturing jobs back to America, could have the opposite effect for everyday consumers. Instead of reshoring factories, the move may reshape household budgets.
Apple’s global machine, built in China
Apple’s iPhone isn’t made in one country. It’s a jigsaw puzzle of parts sourced worldwide—assembled with precision in China, where decades of expertise and scale keep costs low.
Take the iPhone 16 Pro. When it launched, the 256GB version retailed at $1,100. Wayne Lam, a research analyst at TechInsights told the Wall Street Journal, estimates the hardware cost Apple about $550. With assembly and testing, that figure goes up to $580.
Even with the addition of software and services like iCloud and iMessage, Apple retains a comfortable margin. But new tariffs change the equation.
With a 54% tariff slapped on Chinese-made goods, that $580 cost balloons to around $850. Without a price hike, profits vanish. And Apple didn’t get to be a trillion-dollar company by selling at cost.An Apple spokesperson declined to comment on pricing strategy or manufacturing changes.
“A massive, mammoth undertaking”
So why not just build iPhones in the U.S.? That sounds simpler than it is.
“It’s a massive, mammoth undertaking,” says Barton Crockett, senior research analyst at Rosenblatt Securities, as reported by Reuters. The U.S. lacks the labour scale and cost structure that China’s electronics ecosystem has perfected.
Even if Apple shifted just the assembly to the U.S., costs would soar. “It’s not clear you can make a competitively priced smartphone here,” Crockett said.
Lam estimates that labour costs per iPhone in China are about $30. In the U.S., that could be ten times higher—closer to $300. And if Apple tried to build every component domestically? “Yep, a bajillion dollars. And maybe a magic wand,” Lam quipped.
$3,500 iPhones? Analysts sound alarm
Dan Ives, a tech analyst at Wedbush, has offered one of the starkest warnings.
Speaking on Yahoo Finance’s Morning Brief, he said: “If the iPhones were built in the U.S., right off the bat, just under tariffs it’s over $2,000. I believe after Memorial Day, it’s over $2,000. Because they … can’t absorb. We’re not talking like 3 to 5% through the supply chain. They can’t absorb a 50% hit. And then it depends on whatever we got to see what exemptions they get or whatever. That’s why this is, look, it’s a black swan event going back to $3,500.”
In a note to investors, Ives expanded: “50% China tariffs, 32% Taiwan tariffs would essentially cause a shut-off valve from the US tech landscape and in the process cause every electronic to go up 40%-50% for consumers, iPhones made in the US would cost $3,500 (vs. $1,000), and the AI Revolution trade would be significantly slowed down by these head scratching tariffs that NEED to be negotiated to realistic levels.”
His warning has sparked concern across markets and households alike.
How Apple is buying time
There may be some temporary breathing room. According to MacRumors, Apple is likely ramping up inventory to stock U.S. shelves before tariffs kick in fully.
“Trump said that he would implement tariffs, and tech companies like Apple knew that this was coming. It’s likely that Apple has been ramping up U.S. supply of current devices so that it can temporarily avoid raising prices. Under the terms of the tariff executive order, Apple won’t have to pay tariffs for goods that are on a vessel and in transit to their destination before 12:01 a.m. Eastern Time on April 9, so the company has a few more days to stock up as much as possible,” the report said.
That explains why Ives mentioned Memorial Day (26 May) as a turning point—Apple’s pre-tariff inventory may last until then.
Not all experts share Ives’ extreme outlook. Angelo Zino at CFRA Research believes Apple will absorb part of the cost hike.
“We expect Apple to hold off on any major increases on phones until this fall when its iPhone 17 is set to launch, as it is typically how it handles planned price hikes,” he told Reuters. He estimates that price increases might stay within 5% to 10%.
That could take the more budget-friendly iPhone 16e from $599 to around $856—still a jump, but far less shocking than $3,500.
Can Apple escape the China squeeze?
Behind the scenes, Apple is reportedly pursuing multiple options to soften the blow. First, it could apply for component exemptions—something that would require direct negotiation with the White House.
Secondly, Apple could shift production. Some iPhones are already made in India, but scaling up production of top-end models there would take time and investment. 9to5Mac has also reported that Apple may expand in Brazil, where tariffs are only 10%—a fraction of China’s current rate.
The stakes are high, and the outcome is still uncertain. For now, consumers may want to take extra care of the iPhones they already own.
