Yes they could do that, but as you say, it would likely shoot themselves in the foot. I doubt it would compensate seeing as it would likely push consumers towards other brands that are offering better deals without the hikes. The EU and Europe as a whole is largely an Android market and with the cost rises in just about every sector, Apple have to play that one very carefully, especially if their competitors are not hiking their retail costs.Apple could raise prices in the EU and elsewhere to compensate for the significant losses in the US, but I think Tim knows they would be shooting themselves in the foot if they did that.
I paid £1199 for my iPhone 16 Pro Max, theres no way I'd consider going above that ever again and there is a lot of complaints about current costs as they are.