iPhone sticker shock: Will tariffs force Apple to break its iPhone pricing streak?
As the current US administration is embroiled in a reciprocal tariff war with major trading partners like China, Vietnam, and India, and new developments take place almost hourly, one thing that’s even more uncertain is whether Apple’s iPhones will suddenly get more expensive overnight.Â
Starting at 12.01am EST on Wednesday, April 9, the US will be hitting China with 104% tariffs, Vietnam with 46%, and India with 27% on goods exported to the US, which coincidentally includes Apple’s iPhones, which are physically assembled in those countries and then essentially imported to the domestic US market.Â
This means that you might pay a lot more for an iPhone very soon.
An end to Apple’s pricing consistency
Is Apple doomed to be one of the major casualties of the tariff war?
As a result, iPhone pricing has been extremely consistent over the past five years, with a noteworthy exception to the rule being the iPhone 15 Pro Max, which scored a $100 price increase, but also included double the storage in the base version.
However, such a major tariff price hike could easily end that.
While we still don’t know how Apple will react to the new fees and what its policy would be, there’s an extremely high chance that the new tariffs will be passed down to the customers, as Apple most certainly wouldn’t soak up such a large price hike on its own.Â
Here’s what the latest iPhones cost at launch and how much more they might end up costing if we factor in the extra 29% potential tariff hike.Â
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| iPhone Model | Price at launch | Potential price after tariffs |
|---|---|---|
| iPhone 16 Pro Max 256GB | $1,199 | ~$1,559 |
| iPhone 16 Pro 128GB | $999 | ~$1,299 |
| iPhone 16 Plus 128GB | $899 | ~$1,169 |
| iPhone 16 128GB | $799 | ~$1,039 |
| iPhone 16e 128GB | $599 | ~$779 |
How smartphone tariffs work
Double it and pass it to the next person
Unlike other commodities and wares, smartphones are classified under HS code 8517.13.0000 in the U.S. customs tariff schedule. This designation combines smartphones and similar smart devices, like tablets, smartwatches, computers, and so on.Â
What this means in reality is that phones are taxed as whole finished products and are not broken down to the value of their individual components. Apparently, this is unlike some goods like clocks or car parts, where different tariffs might apply to specific components, the phone you are buying is always treated as a single device at the import customs. Â
So when an iPhone is imported, then 100% of the tariff is imposed on the country where it’s assembled, regardless where its chipset, display, battery, or housing originate from. This means that even if all the hardware components get imported from the US to China, where they are only assembled, the resulting brand-new iPhone will still be considered of Chinese origins and the respective customs tariffs will apply. Â
Can Apple move production to the US?
The $3,500 “Made in America” iPhoneÂ
“China stopped being the low labor cost country many years ago and that is not the reason to come to China from a supply point of view. The reason is because of the skill and the quantity of skill in one location, and the type of skill. It is like the products we do require really advanced tooling and the precision that you have to have in tooling and working with the materials that we do are state-of-the-art, and the tooling skill is very deep here. You know in, in the US, you could have a meeting of tooling engineers, and I’m not sure we could fill the room — in China you could fill multiple football fields.” – Tim Cook at the Fortune Global Forum, 2017
In reality, it would realistically take years to establish a well-oiled supply chain, but it’s not time that’s the problem, but labor costs.Â
“Saying we can just make this in the USA is a statement that incredibly understates the complexity of the Asia supply chain and the way electronics, chips, semi fabs, hardware, smartphones, etc. are made for U.S. consumers over the last 30 years,” Dan Ives revealed in a report.
Another opportunity shared by many an analyst is that Apple could essentially try to shake up its supply and manufacturing chain as much as possible to offset the effect of the tariffs as much as possible.Â
If Apple raises prices due to tariffs right now, would they go down if the tariff increases are overturned?
Deep inside, we all know the answer
Well, that’s the million, or more like trillion-dollar question.Â
First things first, Apple still hasn’t reacted to the dynamic international market situation and hasn’t updated the pricing of its latest iPhones on its online store. Such a potential large price increase also warrants at least a press release detailing the reasons for the pricing change.Â
If Apple decided to pass the brunt of the tariff increase to its customers, prices will certainly go up, but there’s always a chance those prices wouldn’t go down even if the tariffs get overturned in the next week, month, or with the next administration in early 2029.Â
One thing is for certain––the era of predictable iPhone prices might be coming to an end.
