Last week, President Donald Trump announced he was adding to his growing list of tariffs with a new 25 percent charge on imported aluminum and steel, regardless of country of origin.
At first glance, things may not seem all that different from what happened in Trump’s first term. Back then, he announced a 25 percent tariff on imported steel, and a 10 percent one on imported aluminum, which both went into effect in 2018. Duty-free exemptions were later agreed with the likes of Canada, Mexico, and countries in the EU, but it seems these will be off the table when the new tariffs begin in March. "No exemptions, no exceptions,” was Trump’s line on the fresh fees.
But what does that mean for the price of consumer electronics—and namely, your next phone? Aluminum is used heavily in the casing for premium handsets like Samsung's Galaxy S25 and Apple's iPhone 16. The iPhone's Pro line used stainless steel for years, and while it switched to titanium for the iPhone 15 Pro, rumors suggest the iPhone 17 family will be switching to aluminum across the board come September. Won’t these metal tariffs affect the cost of metal phones?
It’s not quite that simple. The US tariffs on aluminum and steel affect raw materials, not finished products or processed components, and we already know that almost no phones from Samsung or Apple are manufactured or assembled in the United States—something Trump could be trying to influence.
“The products enter as finished goods, so it doesn't matter,” says Neil Shah, vice president of research at Counterpoint Research and a specialist in the tech supply chain.
“There is some assembly happening in Texas for some Macs [the Mac Pro has been assembled in Texas since 2013], but those components are also with finished machining and not raw, so there's not much implication on pricing there either.”
So if you're planning on buying an iPhone this year or next, can you expect any impact on the cost at all? According to our own analysis of Apple’s latest supply chain disclosures, of the 13 metal ore and metal processing companies listed, eight operate predominantly in China. Two are in Japan, one is in Taiwan, Tata Electronics has a base in India, while POSCO International operates across South Korea and China for Apple’s purposes.
These territories would all be eligible for tariffs if the imported metal was raw, but by the time the metals Apple uses pass the US border, they have become something else.
Trump’s metal tariffs won’t affect Apple (or any other smartphone manufacturer) directly, then, even if they cause significant turmoil in the cost of aluminum and steel in general. But the 10 percent tariffs on Chinese goods Trump announced earlier could have a direct impact on the price you pay.
Around 80 percent of the world's phones are made in China, and while Apple has moved some of its manufacturing and assembly to India, millions of iPhones are still produced by Foxconn in factories in Shenzhen and Zhengzhou.
The 10 percent tariffs, as it stands, will apply to these phones. And according to the Consumer Technology Association (CTA), it’s the American public who will end up paying the price.
“Tariffs are taxes on American consumers, not foreign governments or companies. Increasing tariffs on imports from Canada, China, and Mexico will fuel inflation and raise prices on tech products, automotive manufacturing, and services,” says Gary Shapiro, CEO of the CTA, which is behind the annual CES tech trade show.
“Tariffs are tools for resolving trade disputes—not political bargaining chips for issues like immigration or drug control.”
That probably explains why Apple’s share price dropped 3 percent after the China tariffs were officially announced. But even with those tariffs in place right now, they have not caused a sudden 10 percent rise in US iPhone prices. According to analysts, they may not even result in a 10 percent jump come September when the new iPhones are announced either.
“A 10 percent increase for the consumer will be a hard pill to swallow in a still-tough economy. So it’s quite possible the full 10 percent may not be passed to the end consumer or be negotiated down by that time,” says Nabila Popal, a senior research director at market intelligence firm IDC.
“Although the China tariff has ‘stuck’ so far, it is also possible the situation can change by then. Especially with Trump, anything can change at any time.”
These tariffs being a starting point for negotiations is something Apple is familiar with. The company was granted numerous tariff exemptions during Trump's first term, with Tim Cook even sending Trump a $6,000 Mac Pro after the added import costs on the line’s components were waived. This might help to explain why Cook was so visible at the inauguration this time around, or why he donated $1 million to Trump’s inaugural fund.
“Apple, and other tech giants, work closely with the US government to carve out special exceptions,” says Popal. “We have already seen Trump grant Apple exceptions from China tariffs in the past, so I won’t be surprised if it happens again.”
Made in the USA?
Of course, Trump's public rhetoric on the tariffs is that they are, in part, an effort to reinvigorate the American domestic industry. Phones might be small potatoes in the wider metal industry, but could these tariffs—and tariffs like them—ever really encourage the iPhone, and other smartphones, to be made in the USA?
One somewhat lazy answer to that is, they would cost several times the price, thanks to higher US wages—a price consumers simply don't want to pay.
However, this also downplays the importance of the expertise and infrastructure built up outside the West over not just years, but decades. Even if the metal for these phones could be found on US soil, the production of an iPhone is a global effort, and it’s the most complex components that can’t simply be shifted to homegrown production.
For example, Apple’s A18 and A18 Pro chipsets are made by TSMC, mostly in Taiwan. A few steps down the complexity chart, the iPhone 16 Pro’s IMX903 camera sensor is made by Sony Semiconductor Solutions Group in Japan. If this stuff isn’t made in America, you have to question whether you can really have a phone that is as US-made as Trump might want—even if Apple was to make the bold step of opening an iPhone assembly plant within the United States.
There are some brighter signs for US domestic production, though. After years of development, TSMC’s first fabrication plant in Arizona is finally up and running, and in the process of producing the Apple A16 chips. But there's already a problem.
The A16 is two generations behind the latest iPhone CPU designs on the market from TSMC, and in late 2024, the Taiwanese government confirmed that production of TSMC’s very latest 2-nanometer designs is prohibited outside of the country.
The latest iPhones don’t use 2-nm architecture chips just yet, but they are expected to break that barrier next year. So where are America’s homegrown semiconductor giants?
Nvidia and AMD are fabless producers, meaning they outsource the production of their designs to other entities, predominantly—you guessed it—TSMC. Qualcomm is also almost entirely fabless, leaving Intel as the most well-known player that actually produces its own chipsets. There are early tenuous rumors that Apple may use Intel’s 2-nm processor production process for the iPhone 18 series in 2026.
It’s an expensive move Apple seems unlikely to make without significant government pressure, but it would be a key step forward in the long and uncertain journey to a more US-made iPhone.
Comments
Leave a Comment