Apple Faces Potential iPhone Price Surge Amid U.S. Manufacturing Push

28 May 2025

In a recent development, President Donald Trump has intensified pressure on Apple Inc. to relocate iPhone manufacturing to the United States. He has threatened a 25% tariff on iPhones produced outside the country, aiming to bolster domestic production. Analysts, however, caution that such a move could significantly inflate iPhone prices and disrupt Apple's global supply chain.

Wedbush Securities analyst Dan Ives estimates that shifting iPhone production to the U.S. would take five to ten years and could raise the cost of an iPhone to approximately $3,500, more than triple the current price. He describes the idea of U.S.-based iPhone manufacturing as a "fairy tale" that is not feasible under current conditions.

Apple has been gradually moving production to India to mitigate the impact of tariffs on Chinese imports. Reports indicate that over 50% of iPhones destined for the U.S. market are now produced in India, with plans to increase this to 60-65% by the fall.

Despite these efforts, President Trump remains adamant about domestic production. In a post on Truth Social, he stated, "I have long ago informed Tim Cook of Apple that I expect their iPhones that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else. If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S."

Apple has announced a $500 billion investment in the U.S. economy, including plans to build an advanced AI server manufacturing facility near Houston and doubling its Advanced Manufacturing Fund from $5 billion to $10 billion.

Analysts suggest that absorbing the 25% tariff might be more financially viable for Apple than relocating its manufacturing operations to the U.S., considering the substantial costs and logistical challenges involved.

As the situation unfolds, consumers may face higher iPhone prices, and Apple's supply chain strategies will be under increased scrutiny. The company's ability to navigate these challenges will be crucial in maintaining its market position and profitability.