According to analysts at Bank of America, Apple iPhones see up to a 90% increase in manufacturing costs if the Cupertino tech giant shifts its assembly unit to the U.S. from China because of the ongoing tariff war (via Bloomberg).
While most people thought otherwise, Bank of America analysts led by Wamsi Mohan in a recent report say that the production line shift is indeed technically feasible. However, economic challenges and logistical complexity will exist.
Labor costs and tariffs are driving the price surge
One of the biggest factors? Labor costs in the U.S.—which alone could account for a 25% increase in production expenses. And since many iPhone components would still need to be imported from China, they’d be subject to reciprocal tariffs as high as 125%. These combined expenses could drive up the overall cost of production by nearly 90%, analysts say.
Trump urges Apple to manufacture iPhones domestically
These insights follow former President Trump’s recent comments, where he labeled Apple’s reliance on Chinese manufacturing as “unsustainable.” His administration insists that the U.S. has the resources and skilled workforce to handle Apple’s production needs.
According to White House Press Secretary Karoline Leavitt, Trump believes in reviving U.S. manufacturing. However, shifting an entire production ecosystem isn’t simple. For such a move to succeed, Apple would require government-backed tariff exemptions, infrastructure investment, and workforce training—none of which have materialized yet.
Apple likely to expand in India and Vietnam instead
Amid economic uncertainty and tariff-related challenges, Apple is more likely to expand production in countries like India, Vietnam, and Taiwan. These regions offer lower tariffs, improved infrastructure, and growing support for electronics manufacturing.
In fact, Apple reportedly flew in large shipments of products from China and India just before the new tariffs were implemented—likely in an effort to meet increased demand in the U.S. and avoid future price hikes.
What’s next for Apple amid trade war pressures?
As of now, Apple hasn’t made an official statement about its next move. But given the financial and operational implications of moving manufacturing to the U.S., it’s far more likely that Apple will continue leveraging its factories in India, Vietnam, and Taiwan, which offer more cost-effective alternatives.
With tariffs reshaping global tech supply chains, the Cupertino-based company may reshape its strategy by deepening its footprint in South Asia—rather than relocating back to the U.S.
