U.S. President Trump Pushes for Domestic iPhone Production, Wedbush Dismisses It as an "Imaginary Scenario"
Apple Migrating iPhone Production to U.S. remains a contentious issue despite President Trump's tariff threat on imported iPhones. Wedbush, a leading financial services and investment firm, dismissed the claims of Apple shifting its production to the U.S., terming it a "fairy tale."
According to Wedbush analyst Dan Ives, the cost of an iPhone produced in the U.S. would skyrocket to around $3,500, nearly quadrupling the current starting price of $799 for the iPhone 16. The steep price increase is attributed to higher labor costs, complex supply chain restructuring, additional trade-related costs, and a less favorable economic environment compared to Apple's current manufacturing hubs.
In the presence of these challenges, Wedbush estimates that Apple would likely pass about a third of the higher incremental costs onto customers and suppliers. JP Morgan analysts suggest that such a tariff could extend to all smartphones rather than specifically targeting Apple. They also propose a potential solution where a 5% increase in global iPhone prices could help mitigate the effects of 25% tariffs on devices sold in the U.S.
President Trump has been vocal about his expectations for Apple to manufacture iPhones in the U.S. He has threatened to impose a tariff of at least 25% on iPhones made outside the U.S., including those manufactured in India, where Apple has relocated more of its production due to higher tariffs on China. Apple has not responded to a request for comment.
While Trump has stated his intention to inform Apple CEO Tim Cook of his expectations, Ives asserts that there is no immediate likelihood of iPhone production shifting to the U.S. due to the impracticalities of such a move. Shares of Apple slipped nearly 3% in recent trading on Friday, reflecting the uncertainty surrounding the issue.
In fiscal 2026 and 2027, a 25% tariff on iPhones, accounting for two-thirds of Apple products sold in the U.S., could lower the company's earnings per share by more than 4%, according to Citi analysts.
[1] "Higher labor costs in the U.S. compared to China, India, or Vietnam"[2] "Complex supply chain restructuring and the need to develop a new manufacturing ecosystem domestically"[3] "Additional tariffs and trade-related costs that could be imposed if production remains abroad"
- The steep price increase in an iPhone produced in the U.S., according to Wedbush analyst Dan Ives, is largely due to higher labor costs compared to Apple's current manufacturing hubs like China, India, or Vietnam.
- Due to the complexities of supply chain restructuring and the need to develop a new manufacturing ecosystem domestically, Apple would face a significant challenge in shifting its iPhone production to the U.S.
- JP Morgan analysts suggest that a potential solution to mitigate the effects of tariffs could be a 5% increase in global iPhone prices, which would help offset the 25% tariffs on devices sold in the U.S.
- President Trump's tariff threat on imported iPhones, including those manufactured in countries like India or Vietnam, could lead to additional tariffs and trade-related costs if production remains abroad, as suggested by various analysts.
