Made-in-India iPhones Stay Cheaper in US Despite Trump’s 25% Tariff Threat—Here’s Why

President Trump’s recent announcement of a 25% tariff on iPhones not made in the US has sparked concern among American consumers and global markets. However, iPhones assembled in India are still expected to remain significantly cheaper than those made in the US—even with the new tariff in place.

 

The reason lies in the stark difference in labor and assembly costs. Assembling an iPhone in India costs Apple about $30 per device, thanks to lower wages and government incentives. Adding a 25% tariff increases this cost to $37.50. In contrast, assembling the same iPhone in the US would cost around $390, a 13-fold jump due to higher labor expenses. Even after the tariff, Indian-made iPhones are nearly ten times cheaper to produce than US-made ones, preserving Apple’s profit margins and keeping retail prices competitive.

 

Apple is unlikely to shift production to the US, as building new facilities would take years and dramatically raise iPhone prices for American buyers. The company is expected to absorb some of the tariff cost or make minor price adjustments, rather than pass the full increase to consumers.

 

For now, Trump’s tariff may rattle markets, but Made-in-India iPhones are set to remain the affordable option for US customers.

 

Source: Reuters, Economic Times, AP News