Apple Should Take The 25 Percent Tariff Hit In The U.S. If It Wants To Maintain Profitability, Believes Analyst, Hinting That It Will Be More Expensive To Shift iPhone Production There

By now, nearly everyone has caught wind of U.S. President Donald Trump’s latest statement in which he mentioned that he expects Apple CEO Tim Cook to shift iPhone manufacturing to the U.S., otherwise a 25 percent levy will be applied to these devices. Regardless of whether Trump believes this is possible, an analyst has weighed in on his thoughts, stating that if Apple wants to maintain profitability, the more favorable approach is to absorb those tariffs rather than shift manufacturing to the U.S., which will require a ridiculous amount of capital.

Trump was previously said to have voiced confidence that iPhones can be manufactured in the U.S., but the economics will not make sense at all

Shortly after the Trump tariff announcement, Apple started scrambling in an effort to set up its supply chain outside of China to offset the losses that it would incur if iPhone shipments continued to rack up in just one region. One of these moves included the technology giant’s supply chain shifting the necessary equipment from China to other countries using clever tactics to prevent the authorities from blocking the transportation route.

Now, TF International Securities analyst Ming-Chi Kuo has come forth with a suggestion to Apple where he recommends the Cupertino firm to absorb the 25 percent tariff rather than move its entire iPhone production to the U.S. President Trump has previously stated that he is fully confident that the manufacturing of these devices is possible in the country as the United States possesses the means to make it possible. Unfortunately, he is not taking into account the billions of dollars required to set up production facilities, not to mention hiring experienced personnel to turn this dream into a reality.

In terms of profitability, it's way better for Apple to take the hit of a 25% tariff on iPhones sold in the US market than to move iPhone assembly lines back to US.https://t.co/ycTwPmQyEp pic.twitter.com/VPRRpj0caU

— 郭明錤 (Ming-Chi Kuo) (@mingchikuo) May 23, 2025

Bloomberg’s Mark Gurman had previously commented that there was no universe in which iPhone production was shifting to the U.S., and assuming that it did, the output would likely be significantly slower compared to the volume in China, and prices would have to be jacked up astronomically to make up for the increased labor cost. Trump previously made a statement that he considers Apple CEO Tim Cook to be his friend, but he does not appreciate him setting up factories in India, and wants him to focus on local expansion.

It might be possible to transition some of the production of different Apple products to the U.S., such as MacBooks, as these are manufactured and assembled in relatively less amounts. However, as far as iPhones go, that might be out of the question, meaning that the technology titan would likely have to absorb that 25 percent tariff.

News Source: Ming-Chi Kuo

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