If you have an older Apple device that you've been considering upgrading, you're probably wondering how the newly announced tariffs might impact prices going forward, and whether it's worth buying now before there's a price hike.
Given analyst and economist responses to the tariffs, market panic, and Trump's stance on the current financial chaos, the answer is that making a purchase immediately might save you some cash if things don't change.
iPhones Could Get Much More Expensive
Trump announced a 34 percent tariff on China, which combines with the previous 20 percent tariff for a total of a 54 percent tax on imports from China. China is still one of Apple's major suppliers, and industry analysts consulted by Reuters suggest that iPhone prices could increase by up to 43 percent.
Right now, the most affordable current-generation iPhone, the iPhone 16e, is priced starting at $599. If Apple doesn't receive some kind of exemption or if tariffs don't change, the iPhone 16e could be priced starting at $856. The $799 iPhone 16 could cost $1,142, close to the starting price of the iPhone 16 Pro Max.
Equity research company Rosenblatt Securities believes Apple will need to raise iPhone and Apple Watch prices 43 percent to cover tariffs, iPad prices 42 percent, and Mac and AirPod prices 39 percent. Counterpoint Research co-founder Neil Shah believes Apple would need to raise prices by at least 30 percent on average to offset the tariffs.
Morgan Stanley analyst Erik Woodring told CNBC that Apple would likely need to raise prices by 17 to 18 percent.
Apple has moved some of its production to other countries like Vietnam, India, Thailand, and Malaysia, but all of those locations are subject to tariffs as well. A 40 percent+ price increase is a worst case scenario, and there are a lot of variables at play and factors that could shift in the near future, but it doesn't look like prices are going to remain static.
Could Apple Absorb the Increase?
Trump said that he would implement tariffs, and tech companies like Apple knew that this was coming. It's likely that Apple has been ramping up U.S. supply of current devices so that it can temporarily avoid raising prices. Under the terms of the tariff executive order, Apple won't have to pay tariffs for goods that are on a vessel and in transit to their destination before 12:01 a.m. Eastern Time on April 9, so the company has a few more days to stock up as much as possible.
When available stock in the United States starts dwindling, Apple will have hard decisions to make. Raising prices significantly will impact demand for the iPhone in a market where people are already wary of spending because of economic uncertainty, but such high tariffs would significantly eat into Apple's profit margin and further tank its stock.
Apple could have enough iPhone 16 models in the U.S. already to avoid price increases until the iPhone 17 models launch, but it is hard to imagine a scenario where iPhone 17 prices don't go up at least somewhat.
CFRA Research analyst Angelo Zino said Apple could struggle to increase consumer costs more than 5 to 10 percent. "We expect Apple to hold off on any major increases on phones until this fall when its iPhone 17 is set to launch, as it is typically how it handles planned price hikes," he said.
Bank of America securities analyst Wamsi Mohan said that if Apple were to absorb the entire impact, there could be a $1.24 reduction to earnings per share in 2026. Apple could adjust prices, optimize supply chains, and seek exemptions to deal with the tariffs, according to Mohan, so it's possible Apple will have a multi-prong strategy.
Yale Budget Lab executive director Martha Gimbel told The New York Times that companies are going to have to increase costs. "These are really big tariffs," she said. "These are not things we can expect companies to just absorb."
Will Trump Back Down?
On his Truth Social site, Trump said today that he does not plan to change his policies. Yesterday, he said "I think it's going very well - The MARKETS are going to BOOM..."
He also said, however, that he had a "productive call" with Vietnam about lowering tariffs, and that he is looking forward to a meeting "in the near future."
Trump has gone back and forth on tariffs levied against Canada and Mexico, so it is hard to say what he'll do next. The executive order states that he can increase or expand tariffs based on retaliation, or decrease or limit in scope the tariffs should countries "take significant steps to remedy non-reciprocal trade arrangements and align sufficiently with the United States on economic and national security matters."
What About Congress?
Congress could act, but with a Republican majority, there are barriers. The Senate passed a resolution that would block tariffs on Canadian products, but it will fizzle out in the House. Republican Senator Chuck Grassley proposed a bipartisan bill that would require Trump to notify Congress about new tariffs with Congress given a 60-day period to approve them, but it doesn't have enough Republican support. It's not clear if it will make progress, and it would need to overcome a presidential veto if it did.
Will Apple Get an Exemption?
The last time Trump was in office, he levied tariffs that did not apply to the iPhone, and he gave Apple an exemption for products like the Apple Watch.
This time, Trump has given no exemptions, and it's not clear if he will. Cook met with Trump in February, and even donated $1 million to Trump's inauguration. Cook has no doubt been wooing Trump for an exemption from Apple, but it hasn't worked so far.
Trump used the International Emergency Economic Powers Act to implement tariffs, so any exemption would need to come directly from Trump. There is no mechanism for individual product exemptions, so Apple doesn't even have a way to petition for an exception.
When Will Prices Increase?
If Apple needs to increase prices, it would make the most sense for the company to introduce iPhone price hikes with the iPhone 17, but it's not clear if it will be able to hold off that long, nor when prices on other devices could increase.
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