Apple customers scrambling to upgrade iPhones before tariff price hikes kick in: report
Apple customers are reportedly scrambling to upgrade their iPhones to avoid expected price hikes driven by President Trump’s tariffs.
The looming levies will hit key parts of Apple’s supply chain, including China, where CEO Tim Cook’s firm still manufactures the vast majority of its hardware.
Trump is set to impose a whopping 104% tariff rate on goods imported from China beginning Wednesday after China retaliated against his initial 54% rate, the White House confirmed. The president also has imposed a 46% on Vietnam and 26% rate on India – two other major production hubs for the company.
After initially rallying on optimism that trade talks would bear fruit, Apple shares closed 5% lower in Tuesday trading. Meanwhile, Trump “absolutely” believes that Apple could shift more iPhone production to the US, according to White House Press Secretary Karoline Leavitt.
“He believes we have the labor, we have the workforce, we have the resources to do it,” Leavitt said during a press briefing. “As you know, Apple has invested $500 billion here in the United States, so if Apple didn’t think the United States could do it, they probably wouldn’t have put up that big chunk of change.”
The company’s stock is down more than 30% since the start of the year.
The latest tariff hikes could add even more pain for Apple and its customers than Wall Street initially believed. Based on the initial 54% rate, research firm TechInsights told the Wall Street Journal that the price of manufacturing an iPhone could jump by more than 45% from $580 to $850.
Elsewhere, analysts at Rosenblatt Securities said the cost of buying an iPhone could jump 43%, which would equate to a hike from $799 to $1,500 if passed along to customers.
Apple has yet to confirm whether it will hike iPhone prices in response to higher manufacturing costs or eat the losses to keep prices low.
Still, some customers aren’t taking any chances.
“You gotta take care of your own personal needs and there’s no question in my mind that the prices are going to go up,” Joel Burke, a 32-year-old policy professional, told the Journal.
Another Apple customer, Allison Post, said her plans to upgrade her old iPhone were accelerated due to the Trump tariff announcement.
“The tariffs for sure pushed me out the door,” Post, a 69-year-old health writer, told the Journal. “Why pay what might turn out to be double?”
Employees at a pair of Apple stores in the San Francisco area reportedly said that customers had been citing the tariffs as their reason to buy new iPhones.
Apple did not immediately return The Post’s request for comment.
Still, panic regarding the potential impact on Apple’s business is likely overblown, according to Ivan Feinseth, an Apple analyst and chief investment officer at Tigress Financial.
The company is already taking steps to mitigate the blow – including reported plans to shift more iPhone production from China to India.
“President Trump is just trying to use this escalation of tariffs as a negotiating platform.This is all negotiation,” Feinseth told The Post. “I think the end result will not be as punitive to Apple as people are fearing.”
It’s possible that Trump could grant Apple a tariff exemption for iPhones, as he did during his first term in office, Feinseth added.
He asserted that Apple is unlikely to enact major price hikes because its long-term goal is to “grow their ecosystem” and get more customers spending money on its services, such as AI-powered Apple Intelligence.
So far, the president has yet to say if he will grant an exemption.
Last week, Apple lost more than $300 billion in market value in a single day after Trump announced the heavier-than-expected slate of tariffs.
The 9% decline in trading last Thursday marked Apple’s worst one-day performance since September 2020.
