Apple Has Few Incentives To Start Making iPhones In The U.S.

President Donald Trump’s administration has predicted that its barrage of tariffs targeting China will push Apple into manufacturing the iPhone in the US for the first time.

The key question is how long Apple can hold the line on prices before tariffs erode its profit margins enough to pass costs on to consumers. I Photo: Apple

But that’s an unlikely scenario — even with US tariffs now standing at 145% on products made in China, where Apple has produced most of its iPhones since the first model hit the market 18 years ago, Michael Liedtke reported for the Associated Press (AP).

The disincentives for Apple to shift production domestically include a complex supply chain that the company began building in China during the 1990s.

It would take several years and cost billions of dollars to construct new plants in the US, where Apple would also face economic pressures that could triple the price of an iPhone — threatening to torpedo sales of its marquee product.

“The concept of making iPhones in the US is a non-starter,” said Wedbush Securities analyst Dan Ives, reflecting a widely held view in the investment community that closely tracks Apple.

He estimated that the current $1,000 price tag for an iPhone made in China or India would soar to over $3,000 if production shifted to the US. He added that such a transition likely couldn’t happen before 2028.

“Price points would move so dramatically, it’s hard to comprehend,” Ives said.

If the tariffs persist, Apple is widely expected to eventually raise prices on iPhones and other popular products, since the company's supply chain is so heavily concentrated in China, India, and other overseas markets caught in the escalating trade war.

The key question is how long Apple can hold the line on prices before tariffs erode its profit margins enough to pass costs on to consumers.

One major reason Apple can afford to hold current iPhone prices — for now — is its highly profitable services division, said Forrester Research analyst Dipanjan Chatterjee. That division, which generated $96 billion in revenue during Apple’s last fiscal year, remains untouched by Trump’s tariffs.