Recently, U.S. President Donald Trump suggested that Apple CEO Tim Cook should bring iPhone manufacturing to the U.S. or face a 25% tariff on these devices. However, according to an analyst, the smarter move for Apple would be to absorb the tariffs instead of relocating production, which would involve an enormous financial undertaking.
Previously, Trump expressed confidence in the U.S.’s ability to host iPhone manufacturing. However, the economic reality tells a different story. After Trump’s tariff announcement, Apple started looking for ways to diversify its supply chain beyond China to mitigate potential losses. Part of this effort included strategically moving equipment to other countries without attracting undue attention.
Ming-Chi Kuo, an analyst at TF International Securities, advised Apple to bear the tariff rather than relocate iPhone production to the U.S. While Trump believes the U.S. can handle such manufacturing, he overlooks the massive investment needed for new facilities and skilled labor.
Mark Gurman from Bloomberg has noted that moving iPhone production to the U.S. isn’t feasible. Even if it were attempted, production would likely slow down, and costs would skyrocket due to higher labor expenses. Trump also criticized Apple for its international factory setups, urging them to focus on U.S. expansion instead.
While shifting some production, like that of MacBooks, to the U.S. could be feasible due to lower volumes, relocating iPhone assembly seems impractical. As a result, absorbing the 25% tariff might be the more viable path for Apple.
