Starting tomorrow, Apple might have to raise iPhone prices in the U.S.
Prices of iPhones, iPads, Apple Watches, and all Apple products made in China and imported into the U.S. from China could be about to rise. A report released today says that President Donald Trump is about to announce a 25% tariff on imports from Canada and Mexico and a 10% tariff on Chinese imports. A Tariff is an import tax that U.S. companies pay. These companies can either eat the additional cost and reduce their profits, or they can decide to raise the prices of their products; in the latter case, U.S. consumers pay for the higher prices.
The tariffs would take effect tomorrow, February 1st. No matter what you are told or hear from certain news networks, countries hit by a tariff do not pay them. That's not to say that the countries involved can't feel pressure from them. If U.S. consumers decide that they won't pay higher prices for a product from one of the affected countries, they could make purchases from different companies located in unaffected countries hurting businesses and the economy in Canada, Mexico, or China.
So far the Trump administration has refused to announce whether there will be any exemptions and more information about the tariffs will be announced tomorrow according to White House press secretary Karoline Leavitt who added, "These are promises made and promises kept by the president."
Any device shipped from China to the U.S. would face the 10% tariff which means that more tech companies besides Apple will be impacted when the 10% tariff on Chinese products takes affect starting tomorrow. According to Leavitt, Trump is imposing these tariffs on these countries "for illegal fentanyl they have sourced and allowed to distribute into our country, which has killed tens of millions of Americans."
Last month, Gene Munster, Managing Partner of Deepwater Asset Management, said that two U.S. companies would be able to escape Trump's tariffs on China. Those two companies? Apple, and Tesla (the latter for obvious reasons). During Trump's first term, Apple CEO Tim Cook was able to convince the president not to place tariffs on the iPhone because it would put Apple, an American company, at a disadvantage compared with its top rival Samsung over U.S. phone sales. Samsung manufacturers its phones in South Korea.
Even though Cook has met with Trump several times after the 2024 election and personally donated $1 million for his inauguration, the president might not be so quick to keep the iPhone out of harm's way this term.
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