25% iPhone Tariff Insufficient To Drive US Production Shift, Morgan Stanley Says
President Trump's threat of a 25% tariff on smartphone imports including iPhones would not provide enough economic incentive for Apple to relocate US-bound iPhone production to domestic facilities, according to a new Morgan Stanley note viewed by Slashdot. The tariff threat, announced Friday via social media, appeared to target Apple's recent shift of iPhone production from China to India through its contract manufacturing partners. Morgan Stanley analysts estimate that establishing US iPhone production would require a minimum of two years and several billion dollars to build multiple greenfield assembly facilities, with a trained workforce exceeding 100,000 workers during peak seasons. More significantly, the firm calculates that a US-produced iPhone would cost 35% more than current China or India production, primarily due to higher labor costs and the need to import 25% of iPhone components from China under existing 30% tariffs. By contrast, Apple could offset a 25% import tariff by raising global iPhone prices just 4-6%, making domestic production economically unviable. Read more of this story at Slashdot.
President Trump's threat of a 25% tariff on smartphone imports including iPhones would not provide enough economic incentive for Apple to relocate US-bound iPhone production to domestic facilities, according to a new Morgan Stanley note viewed by Slashdot. The tariff threat, announced Friday via social media, appeared to target Apple's recent shift of iPhone production from China to India through its contract manufacturing partners.
Morgan Stanley analysts estimate that establishing US iPhone production would require a minimum of two years and several billion dollars to build multiple greenfield assembly facilities, with a trained workforce exceeding 100,000 workers during peak seasons. More significantly, the firm calculates that a US-produced iPhone would cost 35% more than current China or India production, primarily due to higher labor costs and the need to import 25% of iPhone components from China under existing 30% tariffs. By contrast, Apple could offset a 25% import tariff by raising global iPhone prices just 4-6%, making domestic production economically unviable.
Read more of this story at Slashdot.
