iPhone prices may cross $2000 due to Donald Trump's tariffs; Here's how

The Apple iPhone could cost upwards of $2000 in the United States in the near future due to President Donald Trump's sweeping tariffs on imports from China and other countries.

According to a report by the Wall Street Journal, Apple’s total cost of parts for the 256 GB variant of the iPhone 16 Pro, for example, will go from $550 to $820. The increase is due to a hike of 54 percent on imports from China, WSJ quoted TechInsights analyst Wayne Lam as saying.

The vast majority of iPhones are assembled in China, but the tech giant uses parts from all over the world to make the finished product.

The total cost of iPhone manufacturing is likely to go up by 43 percent, according to analysts quoted in a Reuters report. This includes manufacturing, testing, and other overhead costs that Apple incurs while making the phones.

That means a customer could have to pay around $1500 for the baseline iPhone 16 model. Currently, it costs $799. The top model iPhone 16 Pro Max, which is a 1TB variant, might end up costing $2,300, up from the current $1,599.

When Trump announced his tariff measures against China during his first term as US President, Apple managed to secure an exemption. The company, however, hasn't been able to secure such an exemption so far this time. No exemptions have been granted so far for any single product.

Problems that Apple faces in iPhone manufacturing and assembly

While the rise in iPhone prices is something that might end up happening in the future due to the tariffs, the overall sales of Apple’s flagship smartphone are already lagging.

The best features of the iPhone 16, a better processor, battery, and camera, and Apple Intelligence, among others, might not be enough to convince customers to shell out such amounts. They are barely doing it as it is.

According to the analysis by the Wall Street Journal, the biggest expense as far as iPhone parts are concerned is the rear camera, costing about $127. The camera is made in Japan. Other parts like the processor and display cost about $90 and $38, respectively. None of these parts is made in the USA. While the processor comes from Taiwan, the display comes from South Korea. The only major American-made part that Apple uses in its phones is the memory chip, which costs about $22.

Donald Trump’s Secretary of Commerce, Howard Lutnick, wants all of the assembly to be done in the US instead of China.

“The army of millions and millions of human beings screwing in little screws to make iPhones — that kind of thing is going to come to America,” Lutnick said in an interview with Face the Nation.

While that may happen, it will surely raise the manufacturing cost of the phone manifold due to the cost of labour. Apart from that, the parts that are made in other parts of the world will still attract tariffs.