President Donald Trump has reignited trade tensions by demanding that Apple Inc. AAPL produce its iPhones domestically if the devices are to be sold in the United States.
In a post on Truth Social Friday, the former president warned that iPhones manufactured abroad—specifically in India—could face a steep import tax of at least 25%. This move could significantly reshape the tech giant’s global supply chain.
Gene Munster, Managing Partner at Deepwater Asset Management, addressed the economic impact of such a tariff in a post on X.
“The market appears to be miscalculating the impact of an iPhone 25% tariff,” Munster cautioned in his post.
He noted that a 25% tax on the import cost of an iPhone—typically around $560—would translate to a retail hike of about $140.
That would bring the average U.S. iPhone price from $970 to approximately $1,110, a 14% jump.
According to Munster, most consumers wouldn’t feel the full brunt of the increase due to installment-based contracts.
He estimated that the added monthly cost could range from $4 to $6.
“That increase of $140 is 80% of the time, spread out over 24 or 36 months via carrier contract. That means the price for the average iPhone buyer would increase by only $4 to $6 a month,” Munster writes.
However, if Apple were to absorb the tariff, its gross margins could dip from 44% to 41%.
Separately, Munster warned last week that OpenAI could pose the most serious competitive threat to Apple in two decades.
He referenced the AI firm’s $6.5 billion acquisition of the hardware venture started by former Apple design lead Jony Ive as a pivotal moment that could impact Apple’s future dominance in consumer tech.
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