Apple's products may rise significantly due to Trump's tariffs

Donald Trump's return to the White House has once again raised the issue of tariffs on goods from abroad. This time, Apple, which has been trying to expand production outside of China for years to avoid tariffs, is under attack.

The New York Times writes about it.

How Apple's prices will change

Back in 2018, when Trump first imposed tariffs on China, Apple began moving its iPad and AirPods production lines to Vietnam and some iPhone models to India. Now, those efforts may be in vain: the president announced tariffs of 46% on Vietnam and 26% on India, citing a desire to eliminate "unfair trade conditions."

The new duties are in addition to the 20% tariffs on Chinese goods, which could soon rise to 34%. Approximately 90 per cent of iPhones sold globally are still made in China, and Apple will now be forced to either pay these fees or raise prices to compensate for the losses.

The exact price increase cannot be predicted; it all depends on whether Apple decides to pass on all costs to consumers. If tariffs on iPhones from China rise to 34%, the cost of producing one smartphone could increase by tens of dollars, which means an increase of about USD 50-70 in the store.

According to Morgan Stanley, the company could lose USD 8.5 billion a year just because of the rise in the price of Chinese iPhones. This will reduce its annual profit by about 7%.

Despite appealing to the White House, Apple did not receive the promised benefits. Earlier, the company managed to avoid tariffs on most products, and the Apple Watch was removed from the list of duties. Now, Trump says there will be no tax exemptions.

In 2017, Apple began manufacturing some iPhones in India and is still trying to expand production there. Vietnam has become an attractive destination for AirPods, iPads, and MacBooks due to its proximity to China.

However, it proved difficult to move the main production to the United States, with problems with staff training and finding suppliers of the necessary components.

The 5.7% drop in Apple's shares following Trump's announcement indicates that investors are concerned about the impact of the new duties. The company does not comment on the situation. At the same time, Trump emphasizes that "fair" tariffs should level the playing field for American businesses.

As a reminder, the European Union has set new requirements for Apple to open its iOS operating system to new technologies. The representatives of the company emphasized that they did not understand why all restrictions usually apply to them, and that the EU requirements could negatively affect all users in Europe.

We also wrote that users filed the class action lawsuit against Apple in federal court. They believe that the advertising of Apple Intelligence capabilities was false, and they did not receive the promised features.