Malaysia's Trade Minister Warns: US Tariff Policy Could Cause iPhone Prices to Soar to the Price of a Car

Taiwan • Business • 04/17 09:07
Malaysia's Trade Minister Warns: US Tariff Policy Could Cause iPhone Prices to Soar to the Price of a Car

Malaysia's Minister of Investment, Trade and Industry, Tengku Zafrul Abdul Aziz, warned that if the United States continues to raise tariffs on Chinese goods, the price of Apple iPhones could skyrocket to be as expensive as cars. Although smartphones are temporarily exempt from tariffs, future policies remain uncertain. Malaysia has initiated negotiations with the United States to negotiate for more exemptions during the 90-day temporary reprieve to lessen the impact on Malaysia's export industry.

Key Updates

04/18 02:38

The U.S. Imposes Port Fees on Chinese Ships as the Trump Administration Escalates the Trade War

On April 17, 2025, the Office of the United States Trade Representative announced a port fee policy targeting Chinese ship port fees, set to take effect 180 days later. This policy originates from an investigation conducted during the Trump administration, accusing China's shipbuilding industry of gaining unfair advantages through subsidies and monopolistic practices. The new measures impose high fees on ships built in or owned by China, featuring tiered rates and exemption conditions, aiming to diminish China's influence in the global shipping industry and foster the growth of the American shipbuilding industry.

04/17 23:05

Starlux Airlines' Response to U.S. Ending Duty-Free Status for Chinese Imports: Monitoring a 90-Day Cargo Shipping Surge

The United States will cancel the duty-free policy for small air packages for imported goods from China on May 2, 2025, leading to fluctuations in the global air cargo market. According to Liu Yunfu, Chief Strategy Officer of Starlux Airlines, despite a "90-day shipping surge," shippers have not shown increased willingness to ship, indicating uncertainty in the market about the policy. Starlux Airlines offers slightly lower freight rates on North American routes compared to its competitors due to its different product mix and cargo size structure. This policy change presents a challenge for e-commerce platforms' small air package business.

04/17 18:05

Temu and SHEIN Adapt Strategies in Response to New U.S. Tariff Policy: Raise Prices and Reduce Advertising Costs

The United States has eliminated the "de minimis" tax exemption policy and levied high tariffs on Chinese goods, impacting Chinese e-commerce platforms like Temu and SHEIN. Both companies have raised their U.S. prices as of April 25 and cut back on advertising expenses to manage rising costs. This action highlights how shifts in U.S.-China trade policies are affecting cross-border e-commerce, forcing these platforms to balance cost control with maintaining their market presence amid policy pressures.

04/17 16:37

Trump advocates for a 245% secondary tariff to counter China's influence: E-commerce shipping is rerouting through Southeast Asia, and Taobao's shipping costs could rise by 10% to 20%.

In early 2025, former U.S. President Trump initiated a 245% tariff on Chinese goods, leading to changes in global supply chains and cross-border e-commerce logistics models. Chinese e-commerce platforms and freight forwarders rerouted goods through Vietnam, Malaysia, Singapore, and other locations before exporting them to Taiwan and the U.S. to circumvent the high tariffs. This action increased transportation costs by 10% to 20% and extended delivery times up to a month, affecting platforms like Taobao. The U.S. removed the de minimis tax exemption threshold, further intensifying logistics pressure, turning Southeast Asia into a new hub for transshipment and production.

04/17 10:40

Trump's revocation of low-cost duty-free policies severely impacts fast fashion and Boeing, worsening the challenges faced by American manufacturing, while benefiting slow fashion and resale platforms.

Starting on May 2, 2025, President Trump of the United States will sign an executive order to remove the "low-value duty-free" tariff exemption on goods from China and Hong Kong, affecting imports valued under $800. This policy severely affects fast fashion brands like Shein and Temu, which rely on Chinese supply chains, forcing them to increase prices and reduce advertising spending. Boeing is facing a crisis as the U.S.-China trade war escalates, reflecting structural problems in American manufacturing. In contrast, slow fashion and second-hand resale platforms like ThredUp and The RealReal are benefiting from localized supply chains and sustainable practices.

04/17 09:07

Malaysia's Trade Minister Warns: US Tariff Policy Could Cause iPhone Prices to Soar to the Price of a Car

Malaysia's Minister of Investment, Trade and Industry, Tengku Zafrul Abdul Aziz, warned that if the United States continues to raise tariffs on Chinese goods, the price of Apple iPhones could skyrocket to be as expensive as cars. Although smartphones are temporarily exempt from tariffs, future policies remain uncertain. Malaysia has initiated negotiations with the United States to negotiate for more exemptions during the 90-day temporary reprieve to lessen the impact on Malaysia's export industry.

04/17 08:38

Due to the China-US tariff war, Tesla halts new car plans, putting Musk under multiple pressures.

Tesla announced the suspension of the trial production plans for the self-driving taxi Cybercab and the electric truck Semi due to the high tariffs the United States imposed on parts imported from China, which led to soaring costs. This decision has severely disrupted the product timeline, putting CEO Elon Musk under pressure from shareholders and the market. Tesla plans to release its first-quarter 2025 financial report on April 22, as investors closely watch how the company tackles challenges such as supply chain disruptions, sluggish sales, and brand controversies.

04/17 02:59

Eclat Enterprise joins forces with five major clients to address the new US tariffs, with short-term and urgent order strategies helping to maintain stable gross margins.

Taiwanese garment giant Makalot Industrial Co., Ltd. (1477), in response to the new U.S. tariff policy, announced during the April 16 earnings conference that it has reached an agreement with its top five clients to jointly bear potential cost pressures. Makalot is adopting a "quick response" strategy to reduce lead times, thereby maintaining stable prices and profit margins, ensuring its gross margin remains unaffected. This strategy showcases its adaptability and reflects the global supply chain's trend towards greater flexibility and diversification.

04/17 02:22

Impact of Trump's Trade War: Decline in Market Share of U.S. Brands in China, Nissan Increases Production Capacity in the U.S., Chinese Factory Workers Respond on TikTok

In April 2025, the Trump administration imposed a 245% tariff on Chinese products and a 25% tariff on imported cars, affecting the global automotive industry. American brands experienced a decline in market share in China, while Chinese brands gained prominence. Nissan announced plans to increase production capacity at its U.S. factories to cope with the tariffs. The former deputy governor of Italy's central bank criticized U.S. policies for disrupting the economic order and urged the EU to increase public spending. Chinese factory workers marketed products to American consumers through TikTok in an attempt to bypass tariffs and challenge Trump's policies.

04/17 01:18

April, 2025: Trump's new tariff policies severely hit the American business sector and stock market, causing the Dow Jones index to plummet by 700 points.

In April 2025, President Trump’s new round of tariff policies shocked the business community and the stock market. The automotive, pharmaceutical, technology, and retail industries faced rising costs and layoff pressures, as the Dow Jones index dropped nearly 700 points in a single day. Although the Trump administration announced a 90-day suspension of some tariffs, market uncertainty stayed high, and businesses and consumers shouldered the costs of the trade war. The tariff policy caused supply chain disruptions, increased consumer spending, heightened inflationary pressures, and raised the risks of slowing economic growth.

iPhone Prices May Soar to $3,500

In a video released on social media on April 16, Tengku Zafrul highlighted that iPhone components come from various countries worldwide, including chips from Taiwan, screens from South Korea, batteries from China, and memory and modems from the United States and Japan, with final assembly taking place in China. According to analysts' estimates, the production cost of an iPhone is approximately $549.73.

If the United States imposes a 145% tariff on Chinese goods, the retail price of an iPhone could rise to $1,400; if Apple relocates the entire production process back to the United States, the price could even soar to $3,500. Tengku Zafrul emphasized that iPhone pricing generally follows the U.S. market, so a price increase in the U.S. would have a ripple effect on other countries.

Tariff Exemptions Are Temporary, Future Remains Uncertain

Currently, the U.S. Customs and Border Protection issued guidelines on April 11, excluding smartphones and laptops from the 125% "Reciprocal Tariff," only subjecting them to a 20% "Fentanyl Tariff." This exemption provides significant relief for tech companies like Apple. However, U.S. Commerce Secretary Howard Lutnick later stated that electronic products might still be included in the new semiconductor tariff range within the next month.

President Trump himself also denied on social media that a permanent exemption for smartphones and chips had been implemented, indicating that policies could change at any time. Tengku Zafrul expressed concern, noting that "Trump might change his mind at any moment and increase tariffs again," and urged countries to maintain an open trade system.

Malaysia's Role in the Global Supply Chain and Response Strategy

Malaysia plays a crucial role in the global supply chain, particularly in the semiconductor sector. In 2024, Malaysia's semiconductor exports to the United States totaled $16.2 billion, accounting for about 20% of the U.S.'s total semiconductor imports. Tengku Zafrul noted that during the COVID-19 pandemic, Ford Motor Company in the U.S. had to halt production due to the inability to obtain chips from Malaysia, highlighting Malaysia's importance in the global manufacturing system.

He described tariff measures as akin to "traffic congestion," affecting producers, consumers, and investors alike. "Chips may be small, but if they're out of stock, an entire factory can't operate. The global supply chain is closely interconnected, and no country can be completely self-sufficient." He emphasized that for trade-oriented countries like Malaysia, open trade is crucial.

Malaysia and the U.S. Begin Negotiations for Exemptions

Facing potential economic impacts, the Malaysian government has initiated diplomatic negotiations with the United States. According to Malaysian Communications Minister Fahmi Fadzil, Malaysia's Trade Minister and Second Finance Minister plan to visit the U.S. by the end of April to discuss tariff issues with U.S. officials. The Malaysian Embassy in the U.S. has also begun preliminary contacts to secure more exemptions for export products within the 90-day grace period.

Tengku Zafrul emphasized that Malaysia has no intention of taking retaliatory measures against the U.S. but hopes to mitigate the impact on the export industry through dialogue and cooperation. He also revealed that Malaysia is considering signing a "Technology Safeguard Agreement" with the U.S. to ensure that export products meet U.S. technical and safety standards.

ASEAN Stance and China-Malaysia Joint Statement

Amid rising U.S.-China trade tensions, Chinese President Xi Jinping visited Malaysia from April 15 to 17 and issued a joint statement with Malaysian Prime Minister Anwar. Both parties emphasized their opposition to arbitrary tariff increases and committed to upholding the multilateral trading system centered around the World Trade Organization (WTO).

Anwar stated that ASEAN countries would not support any unilateral imposition of tariffs and reiterated that China is one of Malaysia's most important trading partners. This stance reflects Malaysia's effort to balance relations between the U.S. and China, maintaining economic and trade cooperation with China while actively negotiating with the U.S. to protect its national interests.

References

People Also Ask...

faq

Will the U.S. raising tariffs affect electronic prices in our community?

faq

The US increasing tariffs may lead to a surge in iPhone prices. How will this affect the global supply chain?

faq

Could U.S. tariffs make iPhones as pricey as cars?