The production of iPhones in the United States would drive their price to $3,500, according to tech analyst Dan Ives. His statement emerges after U.S. President Donald Trump implemented aggressive global tariff policies he believes will create jobs and factories in America. Experts from the industry predict this relocation will create negative effects for both consumer groups and technology companies.
The production of 90% of iPhones takes place in China, while their components originate from Asian countries including Taiwan and South Korea, along with other nations in the region. Apple benefits from a massive low-cost supply chain that enables the company to preserve high profits and minimize production costs. According to Ives, Apple would need to spend $30 billion and three years to shift just 10% of its manufacturing base from China to the United States.
Tech research expert Ives from Wedbush Securities describes the complete domestic production of iPhones as a “fictional tale.” According to Ives, the attempt to establish Asia’s advanced manufacturing systems across West Virginia or New Jersey would create iPhone prices that exceed their current $1,000 value by multiple times.
The implementation of tariffs poses a threat to the performance of Apple stocks. The stock value of Apple declined by about 25% since Trump took office because investors fear the company depends too heavily on Chinese manufacturing operations. The cost of iPhones is expected to increase by 30% to 43% when Apple decides to transfer its tariff expenses to its consumers.
Apple is addressing the situation through a $500 billion U.S. investment and production facility development in India and Brazil, where trade restrictions are less stringent. The current manufacturing capacities in India and Brazil seem insufficient to completely replace China’s position in Apple’s supply chain operations.
The escalating trade war between Trump and China threatens to push up prices that American consumers will need to pay for their purchases.
