Apple’s strategy isn’t changing—even if former President Trump follows through on his threat to slap a 25% tariff on foreign-made iPhones, the tech giant would still make more money keeping production abroad, according to a new Morgan Stanley analysis.
Producing in the US is far more expensive
Morgan Stanley’s public policy team, led by Michael Zezas, estimates that its performance compares favourably to China or Southeast Asia. Apple would also face a years-long ramp-up to build facilities, train workers, and scale production to meet demand, over 65 million iPhones annually for the US market.
Tariff math favors staying overseas: A 25% tariff on approximately $450 in components would cost Apple about $110 per iPhone. To cover that, Apple could simply raise prices globally by less than 5%—a move consumers may barely notice.
Lower-volume products could shift: Apple might consider bringing smaller products like AirTags or HomePods back home, but “even a 25% tariff likely doesn’t create enough incentive to reshore iPhone production,” Morgan Stanley notes.
Apple stock fell 3% Friday after Trump floated the tariff idea, but rebounded 1.7% Tuesday as markets breathed a sigh of relief following a temporary pause in EU tariffs.
Apple isn’t likely to reroute its iPhone manufacturing to the US anytime soon—not even a Trump-era tariff revival can justify it economically.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
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