The cost of building an iPhone is about to spike – and you’ll likely feel it at checkout. A new report from The Wall Street Journal, based on cost breakdowns from TechInsights and iFixit, breaks down how Trump’s latest tariffs on Chinese imports could add hundreds of dollars to Apple’s production costs.
Right now, a 256GB iPhone 16 Pro costs Apple around $580 – that’s the total expense for all components, plus assembly. But under the proposed 54% tariff on Chinese goods, that jumps considerably to about $847. That’s before accounting for additional expenses like research, development, marketing, shipping, and packaging. Apple currently sells that same device for $1,099, so it does have a pretty wide profit margin to play with. But with a new $267 tariff overhead, it’s hard to imagine the company simply absorbing a loss of that scale.
Apple hasn’t officially responded to the tariff announcement, and there’s always a chance something unexpected will happen – a special deal exempting iPhones, or a change in tact that reduces the tariffs sooner rather than later. But based on current projections, it’s unlikely the company will be willing to cut its profit margin by hundreds of dollars per device. Consumers will, quite literally, pay the price. Some analysts are already speculating that the top-end iPhone 16 Pro could breach the $2,000 mark. Cheaper units, like Apple’s “entry level” iPhone 16e (currently priced at $599) aren’t likely to jump by quite so much, but it could still be enough to price potential customers out of an iPhone purchase.
As for alternatives, relocating production to the US isn’t the easy answer it might seem. Labor costs in the US are estimated to be ten times higher than in China – about $300 per phone versus $30 – making domestic assembly a tough sell for a company trying to keep pricing competitive.
The exact pricing changes remain to be seen, but one thing feels certain: iPhones are about to get more expensive. If you’re considering an upgrade, it might be wise to lock one in before any price hikes hit.