Apple, the tech giant known for its innovative products, faces skepticism regarding President Donald Trump’s recent assertion that the company could manufacture its iPhones entirely within the United States. Today, 90% of the country’s supply chain experts would tell you that this idea is absurd, pointing to the logistics of changing gears in such a monumental way. Their argument has taken on new importance as Trump tries to protect his trade war with China by bringing production of key products back home.
If Trump is right that Apple can start manufacturing its iconic iPhone in America, such a move would allow the company to circumvent any future tariffs on Chinese imports. In her first formal press conference, White House Press Secretary Karoline Leavitt doubled down on Trump’s messaging. She touted that he is prioritizing bringing manufacturing jobs back to the U.S. She emphasized, “He believes we have the labor, we have the workforce, we have the resources to do it.”
Apple has previously and directly invested nearly $500 billion into the United States. As experts have pointed out, re-shoring iPhone production wouldn’t be nearly as easy as it sounds. Laura Martin, a Needham analyst, highlighted that Apple would face a staggering increase in costs if it opted to manufacture its flagship product at home. In fact, as Martin implied, relocating production to the U.S. might increase expenses by at least 50 percent.
Dan Ives, the Wedbush financial analyst, figures that a domestically produced iPhone would cost $3,500. That’s quite a jump from the existing price. This price increase would be devastating to American consumers and would likely increase inflation. Martin cautioned that these types of cost increases transferred to consumers would further increase inflationary pressures.
Apple’s blowout earnings and stock performance over the last several months provides the backdrop for this important conversation. Just in the last five trading days, shares have dropped by about 20%. The company’s stock has experienced volatility, with a nearly 2% decline noted in Tuesday’s trading session. Investors are increasingly concerned about Apple’s heavy reliance on China for manufacturing, especially as the country faces a cumulative tariff rate of 104% following Trump’s retaliatory measures.
UBS argues that if engaged, Trump’s reciprocal tariff plan would require Apple to raise costs on its high-end models. In other words, the expected iPhone 16 Pro Max would be potentially $350 more expensive. These rosy financial forecasts have caused investors to respond very quickly, and as a result, this has caused Apple’s stock value to massively drop in the past week.
Martin added that Apple would require years to move its supply chain back to the U.S. He pointed to the great amount of time needed to make this major transition. While the dynamics of the global supply chain are definitely changing, China’s deeply rooted manufacturing ecosystem presents equally serious hurdles. Consequently, Apple and other firms find it difficult to move production back to the U.S.
“There’s lots of worst cases for Apple.” – Laura Martin