This week, Trump revealed his plans for extensive tariffs on all imports entering the United States. This decision caused a significant downturn in the stock market, with Apple and other companies experiencing drops of over 10% for the week.
As the world braces for the repercussions of these tariffs, here’s some straightforward guidance for prospective iPhone buyers.
Trump’s Tariffs
Starting April 5, a 10% “baseline” tariff will be imposed on all imports into the United States. Following this, on April 9, Trump’s tariffs, inaccurately labeled as “reciprocal,” will be enforced. Specifically, imports from China, where Apple manufactures the majority of iPhones and Macs, will incur a staggering 54% tariff. Meanwhile, imports from India, responsible for 10-15% of iPhone assembly, will face a 27% tariff, and imports from Vietnam, a production hub for various AirPods, iPads, and Apple Watches, will be hit with a 46% tariff.
If these figures appear outrageous, it’s because they are. The calculations made by Trump’s economic advisors seem illogical. However, this is the reality we face right now.
The immediate concern is that prices for current iPhones may rise in the coming weeks. I don’t foresee a scenario where Apple absorbs the costs of these tariffs. Economists concur with this sentiment. The primary uncertainty lies in how much inventory Apple possesses in the United States. Tim Cook is renowned for his adept supply chain management, so it’s reasonable to assume that Apple has been ramping up imports to prepare for these tariffs.
This could momentarily postpone the effects of tariffs on some Apple products, but that respite will be short-lived. Therefore, if you need an iPhone immediately or are considering purchasing one soon, it’s wise to act now. Each day you delay increases the risk of sudden price hikes.
In a statement to The Verge, Jason Miller, a Michigan State University supply chain management professor, advised: “If you’re eyeing a laptop assembled in China and questioning whether to purchase now or wait until the fall, I would recommend buying now.”
What About the iPhone 17?
Apple is expected to unveil the iPhone 17 lineup in September. It’s rumored to be the most significant update in years, featuring a new design, enhanced performance, upgraded cameras, and more. There’s even speculation about an iPhone 17 Air, touted to be Apple’s thinnest iPhone ever, measuring just 5.5mm at its slimmest point.
Typically, I recommend that individuals buy an iPhone when they need one, regardless of the season. For those who are on the fence about needing a new iPhone but have some flexibility, I suggest waiting for the new model if we reach the June-July period.
This year, my counsel is taking a different turn. If you anticipate needing a new iPhone any time within the next six months, now is the ideal time to make a purchase. While you might miss out on the new features of the iPhone 17 set to arrive in the fall, buying now can save you a significant amount compared to someone who waits a few weeks.
Conclusion
If I were a betting person, I would bet that Apple will announce price increases shortly before they take effect, hoping to pressure Trump into reconsidering or at least securing exemptions for Apple, similar to those granted during his first term. While this is a risky maneuver that may backfire, it’s noteworthy that Tim Cook has an impressive track record of navigating Trump’s decisions.
Based on current knowledge, here’s what to anticipate:
- iPhones currently sold (iPhone 15, iPhone 16) will likely see price increases sooner rather than later.
- The upcoming iPhone 17 lineup will also be more expensive. Delaying your purchase for the iPhone 17 might end up costing you significantly more than just acquiring new features.
This advice applies not only to iPhones but also to Macs, iPads, Apple Watches, and AirPods. Realistically, it can be applied to nearly any product from any company, but our focus here is on Apple at DMN.
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