Trump's equal tariff policy may cause the iPhone 16 Pro price to soar to NT$80,000, and experts warn that the risk of a U.S. economic recession has risen to 45%.
President Trump's "reciprocal tariffs" policy imposes a 145% tariff on imports from China, which could lead to the price of the Apple iPhone 16 Pro skyrocketing to NT$80,000. This policy has already had an impact on global supply chains and consumer markets, leading financial institutions like JPMorgan to warn about the risk of a U.S. economic recession, estimating a 45% probability. This article examines the policy's impact and expert opinions, highlighting the potential effects of tariffs on the U.S. economy and the prices of consumer electronics.
Key Updates
04/12 07:37
Trump's equal tariff policy may cause the iPhone 16 Pro price to soar to NT$80,000, and experts warn that the risk of a U.S. economic recession has risen to 45%.
President Trump's "reciprocal tariffs" policy imposes a 145% tariff on imports from China, which could lead to the price of the Apple iPhone 16 Pro skyrocketing to NT$80,000. This policy has already had an impact on global supply chains and consumer markets, leading financial institutions like JPMorgan to warn about the risk of a U.S. economic recession, estimating a 45% probability. This article examines the policy's impact and expert opinions, highlighting the potential effects of tariffs on the U.S. economy and the prices of consumer electronics.
iPhone 16 Pro Price Could Skyrocket to 80,000 TWD
The Trump administration officially launched the "reciprocal tariff" policy in early April, imposing tariffs of up to 145% on certain Chinese imports, with Apple being one of the first tech giants affected. According to Shane Oliver, a senior chief economist at AMP Australia, the current assembly cost of the iPhone 16 Pro in China is about $580 (approximately 18,800 TWD). With the 145% tariff, the import cost would soar to $1,340 (approximately 43,600 TWD).
If Apple chooses to move its production line entirely back to the United States, it will face higher labor and manufacturing costs. Oliver estimates that to maintain its current profit margins, the price of the iPhone 16 Pro would need to rise to $2,519 (approximately 81,868 TWD). This price is significantly higher than the current market price, posing a major challenge to consumer purchasing power.
Tariff Pass-Through and Brand Strategy: Apple's Dilemma
Although Apple has not officially announced whether it will pass the tariff costs on to consumers, several analysts point out that Apple has strong brand loyalty and high profit margins, allowing it to absorb some costs in the short term. However, if tariffs persist, passing on the costs will become an inevitable option.
UBS estimates that if Chinese-made iPhones face a 125% tariff, the price of the 256GB iPhone 16 Pro Max will rise from $1,199 to $1,999, an increase of 67%. The 128GB version produced in India, with less tariff impact, will see its price rise from $999 to $1,046, an increase of about 5%. Wedbush analyst Dan Ives warns that if production fully shifts to the U.S., the cost of an iPhone could reach $3,500.
Changes in Consumer Behavior and Buying Frenzy
Facing potential price hikes, U.S. consumers have begun buying in advance. According to TechNews, after Trump announced the tariff policy, sales of the iPhone 16 series grew by 30% to 40%, indicating that consumers are choosing to buy early to avoid future price increases. This "inflation expectation psychology" has also spread to other categories, such as cars and home appliances, with car sales in March increasing by 11.2% year-on-year.
However, experts warn that this type of anxiety-driven consumption could put long-term pressure on household finances. Ted Rossman, a senior analyst at Bankrate, points out that without sufficient cash flow support, reckless spending will exacerbate financial risks.
Increased Risk of Economic Recession: Financial Institutions Sound the Alarm
The Trump administration's tariff policy not only affects the consumer market but also raises high alert in the financial sector regarding economic prospects. JPMorgan Chase CEO Jamie Dimon stated that the U.S. economy is facing "significant turbulence," and maintaining excess capital and liquidity is a prudent approach. Wells Fargo CEO Charlie Scharf noted that the uncertainty brought by trade policies has put pressure on the economy, and he expects a cooling in 2025.
Larry Fink, CEO of BlackRock, the world's largest asset management company, bluntly stated that the U.S. economy may already be in a recession. In an interview with CNBC, he said, "I think we are currently on the brink of recession, if not already in one."
According to FXStreet, JPMorgan estimates the probability of a U.S. economic recession at 60%, while Goldman Sachs adjusted its estimate to 45%. Additionally, the University of Michigan's preliminary consumer confidence index for April plummeted from 57 in March to 50.8, the lowest since June 2022, reflecting public pessimism about economic prospects.
Impact of Tariff Policy on Industry and Supply Chain
The Trump administration's reciprocal tariff policy has caused widespread disruption to the global supply chain. According to the Commercial Times, about 85% of iPhone production comes from China, with only 15% from India. To cope with tariff pressure, Apple has accelerated its efforts to make India an alternative production base, using charter flights to ship 600 tons of iPhones from India to the U.S.
However, supply chain restructuring cannot be completed in the short term. Wedbush analysts point out that moving 10% of the supply chain from Asia back to the U.S. would take at least three years and $30 billion, severely disrupting production. Additionally, some Eurasian companies have temporarily halted exports to the U.S., making it difficult for consumers to obtain certain products even if they are willing to pay high prices.
