US President Donald Trump boasted that “jobs and factories will come roaring back” as he put unprecedented tariffs around the world during his “Liberation Day” speech.
With the implementation of Trump’s sweeping global tariffs, with 125% on China, sharp price increases on everyday products ranging from clothing to electronics could fall heavily on American consumers. Now, a prominent tech analyst has warned that the price of an Apple iPhone could skyrocket to $3,500 if it were made in the United States.
The president and his economic officials promised that as a result of the tariffs, numerous manufacturing jobs will eventually be “relocated” to the United States, employing millions of Americans.
But Dan Ives, global head of technology research at financial services from Wedbush Securities, told CNN’s Erin Burnett that the idea is a “fictional story.”
US made iPhones could cost more than three times their current price of around $1,000, he added, because they would need to replicate the highly complex manufacturing ecosystem developed over three decades that currently exists in Asia.
“(If) you build that (supply chain) in the U.S. with a factory in West Virginia and New Jersey, they’ll be $3,500 iPhones,” he said, referring to the manufacturing plants, or high-tech manufacturing facilities where the chips that power electronic devices are typically made.
Even so, moving just 10% of its supply chain to the U.S. would cost Apple about $30 billion over three years, Ives told Burnett on Monday. CNN has reached out to Apple for comment on this matter.
Smartphone manufacturing and assembly moved to Asia decades ago as American companies focused primarily on software development and product design, which generate much higher profit margins. This decision has helped turn Apple into one of the most valuable companies in the world as a dominant smartphone manufacturer.
Since Trump’s inauguration in late January, Apple’s stock has lost about 25% of its value due to concerns about the impact of tariffs on its extensive supply chain, which relies heavily on China and Taiwan. Approximately 90% of iPhones are assembled in China.
“That’s why I think you’re seeing what’s happened to stocks, because no company is more affected by this tariffs, at the centre of this Category 5 storm, than Cupertino and Apple,” he said. “It’s an economic Armageddon, especially for the tech industry.”
The chips that power iPhones are primarily manufactured in Taiwan, while their displays are supplied by South Korean companies. Other components are manufactured in China, and final assembly is primarily done in the country.
In February, Apple announced it would invest $500 billion in the United States over the next four years as part of its effort to expand production outside of China and avoid Trump’s tariffs there.
Tech analysts agree that iPhone prices are likely to rise, even if supply chains remain stable. Rosenblatt Securities, a New York-based investment bank, said iPhones could be 43% more expensive if Apple passes the full cost of higher tariffs on to consumers, according to a research note cited by Reuters.
Neil Shah, vice president of research at Counterpoint Research, estimates that the iPhone could cost around 30% more, but this could depend on where it’s manufactured.
Apple has sought to diversify its production bases from China to India and Brazil, and may consider moving production of key components to countries with lower tariffs to keep the cost of its phones low. India faces tariffs of 26%, while Brazil has been hit with 10%. While Trump’s tariffs on Brazil are the lowest among major iPhone manufacturing centers, they likely won’t create enough capacity to fill the gap left by China, Shah said.