Why Apple Is Sticking with China Despite 145% Trump Tariffs/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Despite President Trump’s steep tariffs on Chinese imports, Apple remains unlikely to shift iPhone production to the U.S. Analysts cite cost, complexity, and time as key barriers. Trump’s push for domestic manufacturing has yet to move Apple’s plans.
Apple and iPhone Manufacturing: Quick Looks
- Trump’s Tariff Strategy: Aims to pressure Apple into U.S.-based iPhone production.
- Current Tariffs: U.S. tariffs on Chinese goods now at 145%.
- Expert Take: Moving iPhone production to the U.S. could triple the device’s cost.
- Apple’s Market Impact: Shares have fallen 15%, wiping $500 billion in value.
- Manufacturing Reality: Analysts say domestic production isn’t feasible before 2028.
- Apple’s Investments: $500B U.S. commitment includes AI and data centers, not iPhones.
- White House Stance: Officials argue Apple’s investments prove U.S. potential.
- Labor Skills Gap: Apple CEO Tim Cook doubts U.S. has the skilled workforce needed.
Why Apple Is Sticking with China Despite 145% Trump Tariffs
Deep Look
SAN FRANCISCO (AP) — As President Donald Trump ramps up his trade war with China, slapping 145% tariffs on imports from the country, his administration insists that the pressure will force Apple to bring iPhone manufacturing home to the United States. But despite the tough rhetoric, experts say Apple is highly unlikely to make such a move.
The biggest obstacles? Cost, complexity, and time.
According to Dan Ives, an analyst at Wedbush Securities, relocating iPhone assembly to the U.S. would not only take years but would also drive up the cost of an iPhone from about $1,000 to over $3,000.
“The concept of making iPhones in the U.S. is a non-starter,” Ives said. “Price points would move so dramatically, it’s hard to comprehend.”
Apple has remained silent on the tariff issue, declining comment this week. But the company’s stock has taken a hit, falling 15% and losing $500 billion in market value since Trump announced the latest round of tariffs on April 2. That’s a steep price, and it may only rise if Apple decides it has no choice but to pass along higher costs to consumers.
For now, Apple has room to maneuver. The company’s booming services division — which generated $96 billion in revenue last year — remains untouched by tariffs, giving Apple a financial cushion.
Analyst Dipanjan Chatterjee of Forrester Research believes this allows the company to absorb some of the added costs “without significant financial impact, at least in the short term.”
In February, Apple pledged a $500 billion investment in the U.S. through 2028, promising to create 20,000 jobs. But the spending isn’t tied to iPhone manufacturing. Instead, it’s earmarked for things like a new data center in Houston to support Apple’s growing artificial intelligence capabilities.
White House Press Secretary Karoline Leavitt insisted Apple’s investment is a sign the company believes in U.S. manufacturing. “If Apple didn’t think the United States could do it, they probably wouldn’t have put up that big chunk of change,” she said.
Commerce Secretary Howard Lutnick also weighed in, telling CBS earlier this month that Trump’s tariffs will bring back “millions” of U.S. manufacturing jobs, including for devices like the iPhone.
But Apple CEO Tim Cook has expressed skepticism about the U.S. labor force’s readiness for such a shift. At a 2017 conference in China, Cook said it would be hard to fill a room with the skilled tooling engineers needed for iPhone assembly in the U.S.
“In China, you could fill multiple football fields,” he added.
This isn’t Trump’s first attempt to strong-arm Apple into domestic production. During his first term, he made similar demands but eventually exempted iPhones from his tariffs. Apple, meanwhile, began diversifying its supply chain, moving some manufacturing to India and Vietnam.
In a 2019 visit to a Texas Mac Pro plant that Apple had operated since the Obama administration.
Trump claimed credit for bringing the factory to the U.S. “Today I opened a major Apple Manufacturing plant in Texas,” he posted at the time — a statement fact-checkers quickly refuted.
Even with the latest tariff hike, Apple is unlikely to shift course dramatically. The reality is that manufacturing iPhones in the U.S. would not only cost billions and require years to implement, but would also likely alienate consumers unprepared to pay triple the price for the same product.
As it stands, analysts expect Apple to hold current prices as long as possible, but if tariffs persist, consumers may ultimately pay more — not because the devices are American-made, but because trade wars have made them more expensive.
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