Trump's Tariff Policy for 2025 Deals a Major Blow to Apple: iPhone Prices Could Skyrocket, Supply Chain Moves to India, Stock Value Drops by Over $1 Trillion

Taiwan • Business • 04/13 14:39
Trump's Tariff Policy for 2025 Deals a Major Blow to Apple: iPhone Prices Could Skyrocket, Supply Chain Moves to India, Stock Value Drops by Over $1 Trillion

In early April 2025, President Trump of the United States imposed a 145% tariff on imports from China, which had a significant impact on Apple Inc. Since 90% of its iPhone production is concentrated in China, Apple faced significant tariff pressure and considered relocating part of its production to India. On April 11, the Trump administration announced a temporary exemption from tariffs for electronic products, including smartphones, but by then, Apple's stock price had already fallen by 27%, and its market value had shrunk by over $1 trillion. This article examines the effects of the trade war on Apple, including changes in pricing, supply chain adjustments, and market reactions.

Key Updates

04/13 17:06

The United States has temporarily exempted electronic products from tariffs, and the Secretary of Commerce has announced that tariffs on semiconductors will be imposed in one to two months.

On April 13, 2025, the U.S. government announced a temporary suspension of import tariffs on 20 categories of electronic products, including smartphones, laptops, and semiconductor components, offering short-term relief for companies like Apple, Dell, and TSMC. Howard Lutnick, the U.S. Secretary of Commerce, stated that this is a transitional measure, which is expected to be integrated into a new "semiconductor tariff" framework within one to two months, aimed at encouraging manufacturing to return to the U.S. and reducing dependence on Asian supply chains.

04/13 16:38

Trump's Tariff Policy for 2025 Increases Shoe Prices: Brands such as New Balance Face Pressure from Rising Import Costs

At the beginning of 2025, the Trump government implemented a new tariff policy, imposing tariffs as high as 125% on footwear products imported from countries like Vietnam and China, resulting in higher costs in the U.S. footwear market. Even though brands like New Balance stress "Made in USA," price hikes are unavoidable due to their reliance on imported materials. U.S. shoe manufacturing makes up just 1% of the market, and consumer spending is expected to go up, with shoe prices generally rising by 10% to 15%. This policy is intended to encourage the return of American manufacturing, but the supply chain's dependence on Asia makes it hard to avoid cost pressures.

04/13 16:38

Taiwanese companies encounter high tariffs and cost challenges when establishing factories in the US: Cultural differences further complicate matters.

Under President Trump's "reciprocal tariff" policy, Taiwanese companies face challenges in establishing factories in the United States, including high construction and labor costs, cultural differences and management system disparities, and supply chain breaks. Although semiconductor products are temporarily exempt, other high-value products are not, forcing companies to consider establishing factories to avoid tariffs. The experiences of companies like TSMC in establishing factories in the U.S. highlight the challenges of "Made in America" and have led to issues such as labor disputes and legal risks.

04/13 15:36

U.S. Commerce Secretary Howard Lutnick announced new tariffs that will impact smartphones and semiconductors, emphasizing on American manufacturing and national security.

On April 13, 2025, United States Secretary of Commerce Howard Lutnick announced that smartphones, computers, semiconductors, and related electronic products will be subject to the new "semiconductor tariff" system in the next month or two. Although these products were recently granted temporary exemptions, Lutnick emphasized that the exemptions are not permanent. The purpose of the taxation is to encourage manufacturing to return to the United States and to ensure national security. This policy is tied to the Trump administration's national security investigation and may involve a tax rate of 25% or more, with specific details to be announced on April 14.

04/13 14:39

Premier Cho Jung-tai held talks with edamame producers in Pingtung: In response to the competitive pressure from China redirecting exports to Japan, the government is launching an 88 billion NT dollar support plan.

On April 13, 2025, Premier Cho Jung-tai (Chuo Jong-tai) held a meeting with edamame producers in Pingtung to discuss the impact of U.S. tariff policies on Taiwan's edamame industry. Taiwan's edamame exports are primarily to Japan, accounting for 70%, while the U.S. accounts for about 20%. With U.S. tariffs on Taiwan reduced to 10% and Chinese tariffs increased to 125%, there may be a shift to the Japanese market, putting competitive pressure on Taiwan. The government plans to launch an NT$88 billion support program to help businesses explore markets and upgrade equipment. The details of the subsidies will be announced on April 21.

04/13 14:39

Trump's Tariff Policy for 2025 Deals a Major Blow to Apple: iPhone Prices Could Skyrocket, Supply Chain Moves to India, Stock Value Drops by Over $1 Trillion

In early April 2025, President Trump of the United States imposed a 145% tariff on imports from China, which had a significant impact on Apple Inc. Since 90% of its iPhone production is concentrated in China, Apple faced significant tariff pressure and considered relocating part of its production to India. On April 11, the Trump administration announced a temporary exemption from tariffs for electronic products, including smartphones, but by then, Apple's stock price had already fallen by 27%, and its market value had shrunk by over $1 trillion. This article examines the effects of the trade war on Apple, including changes in pricing, supply chain adjustments, and market reactions.

04/13 11:08

Escalation of the US-China trade war impacts the German economy: GDP is forecasted to decline, and exports are hindered, forcing a shift to new markets.

The escalation of the US-China trade war is putting pressure on the German economy, hindering exports, with GDP expected to decline. The German government and industry are seeking strategies, including exploring emerging markets, restructuring supply chains, and driving value chain transformation to lessen reliance on the US and Chinese markets. Reports by IAB and IW show that tariff policies will lead to a drop in Germany's GDP and a decline in employment. Germany is advancing free trade agreements with Southeast Asia, Africa, and Latin America, and enhancing local manufacturing and boosting technology R&D.

04/13 10:40

US-China Trade War Escalates: Trump Set to Announce New Tariff Policy on Semiconductors, Taiwanese Contract Manufacturers Could Benefit

Former President of the United States, Donald Trump, will announce a new semiconductor tariff policy on April 14, with tariff rates expected to exceed 20%, and may involve a national security investigation under Section 232 of the Trade Expansion Act. In response, China is adjusting its semiconductor origin rules, imposing a 125% tariff on U.S.-made chips. This move could potentially benefit Taiwanese foundries like UMC and Vanguard International Semiconductor due to the shift in orders.

04/13 10:08

Trump's tariff waiver causes market fluctuations: Yields on non-investment grade bonds turn negative, Bitcoin rebounds to $8,590, Apple products are unaffected.

On April 11, President Trump of the United States announced a tariff exemption for certain tech products and paused the reciprocal tariff policy for 90 days, which led to fluctuations in global financial markets. Yields in the U.S. non-investment grade bond market turned negative, and Bitcoin's price rebounded to $85,900. Apple Inc. avoided the pressure of high tariffs because its products were exempted. This policy adjustment provided a temporary boost to the tech and crypto asset markets, but it did not eliminate market uncertainty.

04/13 10:08

US-China Trade War: Chinese Suppliers Deny Rumors of iPhone Production Halt, US Grants Tariff Exemptions for Tech Products

On April 9, it was reported that Apple's iPhone production line in China had halted, but Chinese suppliers clarified that operations were normal and the news was a false rumor. On April 11, the U.S. Customs and Border Protection announced a tariff exemption on 20 tech products, including smartphones, offering relief to tech companies such as Apple. This move is crucial for Apple to prevent a significant increase in iPhone prices and to avoid impacting the Taiwanese tech supply chain.

iPhone Prices Could Soar to $2,300

According to reports from the BBC and Yahoo Finance, if Apple cannot obtain tariff exemptions, the cost of importing iPhones to the United States will significantly increase. For example, the iPhone 16 Pro Max, currently priced at about $1,599, could see its retail price soar to $2,300 with a 145% import tariff from China. TechInsights estimates that if Apple chooses to shift part of its production to India, it would still face a 26% tariff, but the additional cost increase could be halved to about $150.

Additionally, reports from The Wall Street Journal and CTEE suggest that if Apple completely relocates iPhone production to the United States, the cost per unit could reach $3,000 to $3,500, nearly three times the current price. This is due to the lack of manufacturing scale, industrial hubs, and low-cost labor in the U.S. compared to China.

Supply Chain Shifts to India: Emergency Airlift of 1.5 Million Units of iPhones

Faced with sudden high tariffs, Apple quickly initiated supply chain adjustments. According to reports from India Today and Gulf News, Apple has been airlifting approximately 1.5 million units of iPhones from India to the U.S. since March and is accelerating the expansion of local production capacity. In the 2024 fiscal year, Apple's iPhone production value in India reached $22 billion, an annual increase of nearly 60%. Currently, Apple assembles the full range of iPhones, including high-end Pro models, in southern India through factories under Foxconn and Tata Group.

According to the Economic Times, iPhones exported from India to the U.S. enjoy a 20% price advantage under the new tariff policy. Apple has also collaborated with the Indian government to establish a fast-track customs clearance mechanism, reducing the clearance time at Chennai Airport from 30 hours to 6 hours to meet the surge in export demand.

Electronics Tariff Exemption: A Temporary Relief for Apple

Following strong lobbying by Apple and other tech giants, the Trump administration announced on the evening of April 11 that electronic products such as smartphones, laptops, semiconductors, and display modules would be temporarily exempt from reciprocal tariffs on electronic products. According to NPR and the BBC, this exemption applies to goods entering the U.S. or leaving warehouses after April 5, without specifying particular countries, but in practice, the biggest beneficiaries are Apple products made in China.

The U.S. Customs and Border Protection (CBP) has updated the tariff schedule, listing the code "8517.13.00.00" for smartphones as an exempt item. This policy shift avoids the immediate price surge "sticker shock" for iPhones, but the 20% tariff on Chinese goods remains due to the fentanyl issue.

Stock Price Plunge: Market Value Shrinks by Over $1 Trillion

Despite obtaining tariff exemptions, Apple's stock price has significantly declined from early April to date. According to Yahoo Finance and the Chicago Tribune, since Trump announced new tariffs on April 2, Apple's stock price has dropped 27%, with its market value shrinking by over $1 trillion. In just three days, the stock price plunged 19%, making it one of the most severely impacted companies in the trade war.

Apple is not the only victim. According to RBC Ukraine and SCMP, the U.S.-China trade war has triggered a global stock market crash, with the S&P 500 and Dow Jones indices each falling over 10% in the first week, and Hong Kong's Hang Seng Index plunging 13.2% in a single day, marking its worst performance since the 1997 Asian financial crisis.

Apple's Dilemma: Between the Chinese Market and U.S. Policies

Currently, about 80% of Apple's iPhones are still produced in China, where it sources most of its components. According to the BBC and Deutsche Welle, Apple has an extensive manufacturing base and sales network in China, contributing 17% of its global revenue. If Apple significantly withdraws from China, it could provoke retaliation from Beijing, including intensified customs inspections, restrictions on government procurement, and antitrust investigations.

At the same time, Apple faces pressure from the U.S. government to bring its manufacturing operations back to the U.S. Although the Trump administration claims this move will create jobs, analysis from CTWant and Bank of America suggests that if Apple moves iPhone production to the U.S., costs will rise by 90%, and it will take several years to rebuild the supply chain.

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