If President-elect Donald Trump follows through with sweeping new tariffs on anything made in China, your next iPhone could cost roughly $300 more, economists estimate.
If you love Samsung phones, the price increase probably won’t apply.
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Americans buy about 130 million new smartphones each year, mostly Apple or Samsung devices, making them one of the most commonly purchased technology products.
The potential higher prices on iPhones show the ways policy decisions in Washington could affect you – and how confusing and arbitrary they can be.
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How iPhones skipped Trump tariffs the first time
First, a quick reminder: A tariff is a tax on products that cross the border.
For a simplified example, when Walmart imports bicycles made in Chinese factories into the United States, Walmart (or typically an importer hired by Walmart) pays a tariff to the United States government.
To pay for that tax, Walmart might pay less to the Chinese factory for those bicycles, absorb the cost of that tax itself, raise the price for that bicycle in its stores, or a combination of those three.
Trump and some conservative economists say tariffs don’t increase prices. But economists almost universally say that shoppers wind up paying more for a bicycle as a result of the tariff.
During the first Trump administration, though, Apple CEO Tim Cook helped persuade the White House to skip tariffs on most products the company sells. That included iPhones, the vast majority of which are made in China.
Cook reportedly told White House officials back then that tariffs would raise prices on smartphones, computers and tablets and hurt Apple. The White House appeared to agree. The administration of President Joe Biden largely kept in place the Trump administration’s tariffs.
So while bicycles, luggage and washing machines imported from China had been subject to increased tariffs, iPhones, Mac computers and iPads assembled in Chinese factories have not.
“Consumer electronics were definitely privileged,” under U.S. tariff policies in the Trump and Biden administrations, said Mary E. Lovely, an economist with the Peterson Institute for International Economics. “That shows the Tim Cook effect.”
No one knows what the Trump administration 2.0 will do. But as a candidate, Trump discussed a 10 to 20 percent tariff on goods imported from anywhere and a 60 percent or higher tariff on everything from China.
Calculating that tax isn’t straightforward, but several trade experts said the tariff percentage, if it’s applied to Apple products, could impose a roughly $300 tax on a $1,000 iPhone. A portion of that higher tax would probably show up in the price you pay for iPhones.
