Fears iPhone prices will increase due to Trump's tariff hikes as customers rush to buy devices

Donald Trump’s new tariffs have caused concern across the world, with fears looming about a potential recession. As consumers face an uncertain future, tech consumers are now rushing to stores to buy iPhones for a very specific reason.

The US president announced new tariffs that will affect the price of importing goods to the US, with new fees as high as up to 50 per cent. He made the announcement on what he called “liberation day” and said the “reciprocal tariff” regime will help the US.

The Trump administration’s new tariffs have made Apple Inc.’s share price plummet, with the company’s valuation falling more than half a trillion dollars in the last two days of trading last week. The tech company assembles most iPhones in China, a country now facing massive tariffs of 54 per cent. Trump threatened China with an extra 50 per cent tariff on goods if it does not withdraw its 34 per cent counter-tariff.

In response to the trade war, employees at Apple locations in the US said customers filled stores over the weekend. Shoppers reportedly expressed their concern about price hikes after the levies were imposed. This has led to customers “panic-buying” iPhones, Bloombergreports.

“Almost every customer asked me if prices were going to go up soon,” one employee told the publication. Apple’s US retail stores experienced higher sales in the first weekend since the tariffs were announced, according to an unnamed source privy to the matter.

Will iPhone prices go up in the US because of Trump’s tariffs?

Industry analysts are trying to gauge how the 54 per cent China tariff will impact prices. Some speculate that iPhones could cost thousands of dollars soon.

Analysts at Rosenblatt Securities shared frightening projections about potential price increases. Apple launched the iPhone 16 model with a sticker price of $799, but this could cost as much as $1,142 based on calculations of a price increase of 43 per cent if Apple passes the extra fees on to its customers, Reuters reports. Rosenblatt Securities says Apple would need to hike iPhone prices by 43 per cent to cover for the new tariffs

Apple’s cheapest new phone, the 16e, launched in February priced at $599 but a 43 per cent price hike could push its cost to $856.

Meanwhile, the more expensive iPhone 16 Pro Max, which currently costs $1,599, could cost nearly $2,300.

Apple launched the 16e in FebruaryApple

Apple could absorb the extra costs and deal with lower margins, or it could pass the extra expenses onto customers by raising prices. Bloomberg reported that Apple has been preparing for tariffs by “stocking up on inventory” and “steering more devices made in India to the US market”, which is facing a lower levy than China.

The company plans to make about 25 million iPhones in India, which is around 10 million more than usual, Bank of America analyst Wamsi Mohan told The Wall Street Journal.

Trump imposed tariffs on Chinese imports during his first term as president to pressure US companies to manufacture products in the US, or nearby countries like Mexico. Apple, however, secured exemptions or waivers for several products. Trump has not guaranteed any exemptions this time around.

"This whole China tariff thing is playing out right now completely contrary to our expectation that American icon Apple would be kid-gloved, like last time," Barton Crockett, analyst at Rosenblatt Securities, said, per Reuters.

However, equity analyst Angelo Zino, said the company may struggle to persuade customers to pay increased prices of more than five per cent to 10 per cent on its devices.

Zino, from CFRA Research, said: "We expect Apple to hold off on any major increases on phones until this fall when its iPhone 17 is set to launch, as it is typically how it handles planned price hikes."

Indy100 has contacted Apple for comment.

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