Apple considers iPhone price hike amid tariff pressure, but avoids blaming China trade war

Apple considers iPhone price hike amid tariff pressure, but avoids blaming China trade war

Apple is preparing to increase prices on its upcoming iPhone 17 models this fall, a move driven by rising tariff-related costs and limited options for absorbing them through its supply chain. But in a politically sensitive climate, the company is being careful not to attribute the price hike to US tariffs on Chinese goods—even as those tariffs pose a growing financial burden, the Wall Street Journal reported.

Tariff pressure mounts on iPhones despite trade thaw

Though the US and China recently agreed to suspend most of their tit-for-tat tariffs, a 20% levy on Chinese smartphones imposed by President Donald Trump remains in effect. While Trump temporarily reduced his separate “reciprocal” tariffs on Chinese goods to 10% under a new trade agreement, the smartphone-specific duty has not been rolled back. That leaves Apple in a bind, as many of its high-end devices—including the iPhone Pro and Pro Max—are still primarily made in China.

Apple CEO Tim Cook confirmed that the company expects $900 million in additional costs this quarter due to tariffs. To shield its margins, Apple has considered raising iPhone prices, particularly for the higher-end models that make up more than half of US iPhone sales, according to estimates from Jefferies.

A pricing dilemma with political stakes

Internally, Apple executives are wary of citing tariffs as the reason for any price increases. According to people familiar with the matter, the company fears drawing political scrutiny or public backlash, especially after the White House recently criticized Amazon over reports that it might display tariff-related surcharges to customers.

Instead, Apple is expected to pair price hikes with new design and feature upgrades. This fall’s iPhone 17 lineup is rumoured to include a redesigned ultrathin model and other format changes, which Apple hopes will help justify higher prices without referencing trade policy.

Currently, Apple’s iPhone range starts at $799 for the base model and stretches to $1,199 or more for the Pro Max. The company has not confirmed how much prices could rise but is said to be preparing a messaging strategy that highlights innovation rather than cost pressure.

Apple shifts more production to India — slowly

As part of its broader strategy to diversify manufacturing, Apple has been moving production of iPhones for the US market to India. Cook said a majority of iPhones shipped to the US in the April-June quarter would come from Indian factories. However, Apple still relies on Chinese facilities for its Pro models, which involve more advanced manufacturing and component assembly.

Analysts estimate that India accounted for about 13% to 14% of global iPhone shipments last year, a figure expected to double by the end of 2025. But that still won’t be enough to meet demand in both the US and India. Analysts at Jefferies cautioned that producing 40 million high-end iPhones in India within two years is a “tall order,” even as Apple ramps up investment in the region.

Despite long-term optimism about India’s manufacturing potential, experts say China will remain a critical source for components and high-volume production for years. Apple is also studying the feasibility of moving some manufacturing to the US, but such a shift would take years to materialise.

Apple is facing the tough reality of navigating a shifting global trade landscape while preserving its premium product margins. With tariffs likely to remain a cost burden, raising iPhone prices may be unavoidable—but how the company explains it could be just as important as the price itself.