Donald Trump’s new tariffs has meant that Apple needs to think on its feet to avoid steep new costs.
Donald Trump’s new tariff has created a bit of scramble for companies that import into the US from abroad.
Trump insisted that his ‘Liberation Day’ tariffs, announced on April 2, would ultimately benefit the American economy and people - albeit eventually rather than immediately.
However, nation leaders, allies and trade partners alike, have been up in arms at the shift away from the status quo.
Advert
Trump announced a 10 percent ‘baseline’ tax would apply globally - with higher rates for a 60-strong country list dubbed as Trump’s ‘worst offenders’.
As well as this, a 25 percent tariff was also slapped on all foreign-made automobiles.
Most notably, China was one of the nations hit the hardest and has already made it clear they plan to retaliate against the tariffs.
Trump has repeatedly hit back against China and stood by his decision to see the country hit a total tariff of a staggering 54 percent.
As Apple produce many of their tech products in the country and sell to the US, experts have warned the price of their goods could sky rocket.
Apple seems to have a short-term fix for this issue, however, and is planning to produce many of its iPhones in India, as the country faces a lower 26 percent rate.
The tech company plans to produce 25 million iPhones in India this year, with up to 10 million originally meant for local sale.
However, this isn’t just in response to tariffs, as the company has been trying to reduce its reliance on China since 2017.
It has also seen benefits due to the fast-growing smartphone market in the country.
This would likely save the company from some of the increased costs it is set to face as a result of the tariffs.
Analyst at Wedbush Securities Dan Ives, spoke to the Daily Mail and revealed just how expensive iPhones could get if the phone’s production moved to the US rather than a foreign nation.
Ives said: “For US consumers, the reality of a $1,000 iPhone being one of the best-made consumer products on the planet would disappear.
"It speaks to our point that if consumers want a $3,500 iPhone, we should make them in New Jersey or Texas or another state... the concept of making iPhones in the US is a non-starter in our view at $1,000."
He added: "Making Apple products and iPhones in the US sounds great behind the microphones in the 202 area code... but in reality they are a fantasy tale that in our view will never happen..... and if they are produced in the US will be 2x-3x more expensive.”
Topics: Apple, China, Donald Trump, India, Politics, Technology, Tariffs
Gerrard Kaonga