President Trump’s new tariffs on China could push up iPhone prices

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President Donald Trump announced over the weekend that he would be implementing 10% tariffs on China – which could affect Apple – and 25% tariffs on Canada and Mexico. Mexico and Canada both quickly capitulated and tariffs on those countries were paused on Monday for 30 days when each will be assessed for compliance, but the levies on China went into effect overnight into Tuesday and could affect iPhone prices.

Angela Palumbo for Barron’s:
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Just a few of the companies that could feel impacts from tariffs include chip company Intel and PC maker Dell Technologies along with smartphone giant Apple.

Apple is an interesting piece to the tariff puzzle. Most of Apple’s manufacturing is done in China. Importantly, though, the Cupertino-based tech giant was exempt from tariffs the last time Trump was in office.

When asked about the potential impacts on tariffs during Apple’s first-quarter earnings call on Jan. 30, CEO Tim Cook said the company is monitoring the situation, but had nothing more to add…

“As the new tariff is imposed on imports from China, Apple could have its manufacturing partners ramp up production in India and ship to the U.S. This could also be done for other Apple products that are manufactured in countries including Vietnam, Malaysia, etc.,” BofA Securities analyst Wamsi Mohan wrote on Monday. “We have assumed 80% of Apple products sold in the U.S. can be sourced from other countries, apart from China.”

It’s also possible that Apple chooses not to increase prices for consumers to keep a competitive edge.

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MacDailyNews Take: Apple has the margins to absorb most any extra tariffs on China if they go beyond the short-term negotiating tool stage.

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