iPhone prices could rise – not just because of US punitive tariffs
Apple currently "only" pays a 20% surcharge when importing iPhones from China to the USA. The company could use this for a general price increase.
An iPhone: Is Apple using the new US tariffs to increase margins?
(Image: Sebastian Trepesch)
Apple is apparently planning a major price increase for its iPhone 17 series models to be released in the fall. The Wall Street Journal reports, citing informed sources, that the current trade conflict with China is explicitly not the main reason for this. Instead, “new functions and design changes” would serve as justification to improve the margin – or at least maintain it.
Price increases not only in the USA
Apple currently pays a punitive 20 percent tariff on iPhones imported into the USA from China, known as the Trump administration's Fentanyl Tariff. Originally, the tariffs were set at 145%, but the US government introduced a 90-day suspension on electronic products. Following a provisional agreement between China and the US, at least the extremely high punitive tariffs are now off the table and will instead temporarily amount to 10%. However, Apple has already set aside an additional 900 million US dollars for the current quarter to cover the 20 percent that is likely to be added. So far, there has been no price increase for current devices for US citizens.
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Apple is trying to outsource as much iPhone production as possible to India, but this could take years. Furthermore, it is not clear whether the rather mild tariffs on the subcontinent, which is now the most populous country in the world, will remain in place compared to China. It is also difficult to manufacture all Pro and Pro Max models of the iPhone in India.
India only takes over parts of the production
According to the Wall Street Journal, the main production will remain in China, as India currently still seems to lack the capabilities for equivalent mass production. Increasing pressure on upstream suppliers to lower prices is also unlikely, as they could also be affected by import duties. A general price increase could also have one advantage: It would then presumably apply not only to the USA, but immediately worldwide, including Europe.
It is currently still unclear how much Apple would increase prices. The “iPhone 17 Air”, a particularly flat smartphone, could justify higher costs to customers due to its design. The iPhone 16 currently costs around 800 dollars in the USA, while the iPhone 16 Pro Max costs at least 1200 dollars. The iPhone 16 Plus is available for 900 dollars (all prices excluding VAT).
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